Current ERN Stock Info

Frank Ingriselli, independent director and chairman of Erin Energy (ticker: ERN) discussed the Oyo-9 well and related activity on Erin’s prospects offshore Nigeria during the company’s Q3 call last week.

Frank Ingriselli: This is my second earnings conference call after my election as Chairman of Erin Board last May. At that last call, I acknowledged that it is an honor and privilege to be back at Erin Energy. And I also promised that all of my efforts at Erin will be dedicated towards driving shareholder value.

We made that last call in early August and since then, our stock price has grown by over 40% and our market cap has grown by well over a $100 million.

As Femi mentioned, we successfully drilled the Oyo-9 well and confirmed the oil deposit. This well is staged, so that we can re-enter and tie this well back to our FPSO to commence production in the future.

At the last conference call, I also talked about Erin having world-class assets and how it is all about location, location, location. We are on the 5th Avenue of locations with our Nigerian offshore assets. We’re surrounded by giant fields, operated by the giants in the oil industry. And each producing hundreds of thousands of barrels of oil per day.

The assets of a multi-billion dollar enterprise

We have the assets to grow Erin into a multi-billion-dollar enterprise. How do we get there? We get there, by bringing in the elephant size prospects we have been blessed with.

We will very soon begin to drill one of those potential giants. The Oyo Northwest Miocene prospect. That field has been independently assessed as having potentially over 1 billion barrels of reserves. But it doesn’t end there. We have other prospects offshore Nigeria, that you can read more about in our corporate presentation on our website, prospects such as Erin and the G prospect, these all have the potential for billion barrel reserves.

Q3 highlights

  • Crude sales volumes of more than 600,000 net barrels of oil
  • $33.6 million in revenue
  • Average daily production of 5,000 net barrels of oil
  • Reported a net loss of $14.1 million, or a loss of ($0.07) per basic and diluted share

Oyo-9, Oyo North West

Erin Energy Corporation’s CEO Femi Ayoade said, “We completed the drilling phase of Oyo-9, have secured a funding commitment for Miocene exploration in OML 120, and will spud the Miocene exploration well before year-end.”

Pacific Bora drilling rig arrives at Oyo-9 field in
deepwater offshore Nigeria

Oyo results indicate the presence of stacked channels and 85 feet of net hydrocarbon sands. A decision to temporarily suspend the completion and hookup phase was made due to chronic delays in the release of remaining funds by the guarantor of the project facility, the company reported.

Erin Energy exercised the first option in its current drilling contract to drill the Oyo North West (ONW) prospect. Erin Energy has four drill-ready prospects, which target P50 Prospective Resources of 2.4 billion barrels of oil.

CEO Ayoade said, “The stacked channel sequences are stratigraphically trapped at all levels. This process area is quite large, with amplitude anomalies covering between 17 to 32 square kilometers.”

Erin Energy has a contract with Ikon Science to conduct an independent third-party technical study of these prospects. According to Erin Energy, Ikon Science is an expert in rock-related physics and Ikon applies this expert knowledge to the analytical process.


Following the recent decision of the Special Chamber of the International Tribunal of the Law of the Sea (ITLOS) in Hamburg concerning the maritime boundary dispute between Ghana and Côte d’Ivoire, Erin Energy is working with the Government of Ghana and its partners to progress the development activities in its ESWT block, offshore Ghana.

The ESWT block has three discovered fields with total in-place oil volume of 500MMstb. The 3D seismic data which will be acquired in Q2 2018, will be used to improve subsurface definition and optimization of drilling targets.

Conference call Q&A

Q: I have had a really hard time trying to understand the explanations for ‘nine’ and also for the exact timing on the Miocene. The spud on the Miocene exploration would happen well before the year end. Could you explain why have we completed nine, and we are yet to be able to tie that and then start producing.

ERN: You’re correct on the Miocene. That well will get spud in this quarter. There isn’t a lot of time left in this quarter, it’s about seven weeks, so that’s going to happen — that will happen soon.

Regarding the Oyo-9. What I can tell you is that Erin is working diligently to resolve its differences with the other parties and we’ll keep the investors up to date on that progress. I can’t for reasons, which I hope everybody understands, can’t get into the details of that right now, but we are working to resolve that. When we get that funding released, we will go and continue to complete that well and produce that well.

Q: Will you have access to the materials you need in order to get that completed, whenever this funding occurs, or is that something that could also delay production because it would take some time in order to get a boat there or whatever you need?

ERN: Well, that’s a very good question. The materials that we need to complete a well right now, as far as it is still being manufactured, and that’s one of the things that we are trying to tell the guarantor of the loan to be wary of. So that we don’t honestly delay the production, because all these things need to be manufactured and be completed on time, for us to be able to put the way back on production at the right time.

Q: How long from the time you get the cash resolved to actually getting to the point where you’re going to produce?

ERN: Well, it depends on so many other things. It depends on the times that equipment is actually completed. It depends on the rig availability at that particular point in time and it also depends on the installation vessel availability. Because installation vessel is about the window.

I think we should be able to get back online let’s say Q1, Q2 next year.




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