Current SLG:CA Stock Info

Sterling Resources speeds up Bretana field development

Peru-focused E&P Sterling Resources Ltd. (ticker: SLG) has advanced the 2018 capital program at the Bretana field in Northeast Peru. Last December, the company acquired 100% working interest in the field. At the time, the company estimated that the project would come online in 10 to 12 months for ~$24.6 million.

Sterling Resources Taps Peru

SLG Bretana Oil Field, May 2018

Project’s budgeted cost goes down

Today, Sterling updated the project’s cost to approximately $18.3 million and first production could be early as June 2018. The updated budget is 25% less than the original estimate and projected first production is now ahead several months ahead of schedule.

The company’s use of a wireline unit, rather than a workover rig, to remove plugs and remediate the oil producer and water disposal wells should cost ~$300,000 – significantly less than the budgeted $2.0 million, Sterling said.

Additional savings resulted from the execution of a turn-key contract to build and install all the production facilities, and a corresponding contract for the personnel and costs associated with construction at the Bretana field.

100% oil

The company’s existing Bretana oil well is expected to initially produce 100% crude oil with no water. Oil production facilities are being installed first, so the well can open in June at a rate of ~1,000 BOPD. Sterling said it is 80% done installing the oil production facilities.

Sterling Resources Taps Peru

SLG Existing Oil Well Schedule, May 2018

Water treatment and reinjection facilities are on schedule to be ready by October 31, 2018, at which time the oil well would be opened up to produce ~2,250 BOPD, with increased choke slated in September at a rate of ~1,500 BOPD.

The company intends to sell the initial 1,000 BOPD production at the Iquitos refinery, which has capacity to purchase the initial production, with the additional (October) 1,250 BOPD production to be transported via an existing oil pipeline for marketing and sale.

Sterling Resources Taps Peru

SLG Iquitos Refinery, May 2018

“The company’s progress to date is a direct result of having the right team in place to execute our program,” President and CEO Manolo Zuniga said. “Not only is the capital expenditure savings significant, but the initial oil production and sales will bring important cash flow to the company.”

Sterling Resources, an EnerCom conference presenting company

Sterling Resources will be presenting at the 23rd annual edition of The Oil & Gas Conference®. The conference will take place August 19-22, 2018, at the Westin Denver Downtown. Investment and oil and gas professionals may register for the event through the conference website.


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