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Byron Energy Won Eugene Island blocks 62, 63, 76 and 77, at Gulf of Mexico

Source: www.gulfoilandgas.com 6/12/2018, Location: North America

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Byron Energy Limited (Byron) (BYE) is pleased to announce that Byron Energy Inc., a wholly owned subsidiary of the Company, has been advised by the Bureau of Ocean Energy Management (BOEM) that its bids for Eugene Island blocks 62, 63, 76 and 77, at Gulf of Mexico OCS Lease Sale 250 held on Wednesday 21 March 2018 in New Orleans, Louisiana, have been deemed acceptable by the BOEM and the leases have now been awarded to Byron.

In the Company’s ASX release dated 22 March 2018, we advised that Byron was the apparent high bidder on the four Eugene Island Blocks.

The Company bid $253,000 for each block for a total of $1,012,000 for all four blocks as the lease bonus amount. With the recently reduced royalty rates in place for new shelf leases in the Gulf of Mexico, Byron will now receive an 87.5 % net revenue interest (previously 81.25%) for its 100% working interest in blocks EI 62, 63, 76 and 77. Final payment for the four leases and first year lease rentals are due 26 June 2018.

The EI 63 and 76 leases were previously held by the Company before being relinquished in January of 2018 and were included in Byron’s independent Reserves and Resource Report released to ASX on 28 September 2017, prepared by Collarini and Associates (“Collarini”). Byron’s latest in-house mapping indicates a total gross prospective resource of 308 bcf of gas and 12,600 mbo of oil for all four blocks (270 bcf and 11,025 mbo net to Byron). EI 62, 63, 76 and 77 will all be included inCompany’s independent reserves and resource report, as at 30 June 2018, expected to be completed in the September quarter of 2018.

Eugene Island Blocks 62, 63, 76 and 77 were designated as the Eugene Island 77 Field in the 1960’s and have produced 362 billion cubic feet of gas and 6.5 million barrels of oil from sands trapped by the Eugene Island 77 salt dome. Initial production from the field began in 1957. There is no production on these blocks currently.

In 2014, Byron undertook proprietary Reverse Time Migration (“RTM”) utilizing WesternGeco (a Schlumberger group company) over the entire Eugene Island 77 Field. Byron has identified a number of exploration and exploitation opportunities using the RTM seismic data. Many of these prospects are in an updip position to previous oil and gas production and are considered to be low to moderate risk drilling opportunities. RTM data was instrumental in identifying the prospect that led to Byron’s recent successful drilling campaign and subsequently establishing production at South Marsh Island 71. Byron’s stated strategy is to identify opportunities for growth in the Gulf of Mexico using state of the art geophysical technology.

As announced In the Company’s ASX release dated 22 March 2018, Byron was also apparent high bidder for three other blocks at Sale 250. Those blocks, South Marsh Island 70, Vermillion 232, and Vermilion 251 have not yet been awarded. BOEM has 90 days from the March 21 sale date to finish its evaluation of submitted bids, unless BOEM extends the deadline.

CEO Comment
Byron’s CEO Maynard Smith said:
“We are very pleased to announce that our bids for EI 62, 63, 76 and 77 have been accepted by BOEM. Our proprietary RTM data has identified a very good mix of exploitation type opportunities which follow up older wells drilled on all four blocks and some high potential exploration opportunities in other parts of the blocks. Our team of experienced professionals has worked this dataset thoroughly and folded historical production data in to our analysis to identify these prospects which will grow in value as oil and natural gas prices strengthen.”

“Once again, the use of high tech geophysics has allowed us to identify and add another high-quality asset to our project inventory. The continued, steady production and cash flow from our operated SM71 oil project will provide a financial foundation as we move toward the drilling phase of the Eugene Island project with a goal of re-establishing production within the old EI 77 field. Acquiring these leases with a 100% working interest over an entire productive salt dome and with no obligation to joint venture or farm-out partners adds significant optionality to our portfolio of projects beyond SM71, SM74 and Bivouac Peak.”

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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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