MX Oil, the AIM quoted oil and gas investing company, is pleased to provide the following update on its Nigerian investment. On 19 October 2016, the Company announced that PR Oil and Gas Limited, the holder of its investment in OML 113, had received US$1.2 million for its share of the proceeds from the sale of the first production of oil from the Aje Field, which forms part of OML 113.
Production from the Aje Field continues to be limited by the performance of the Aje-5 well which, as previously reported, requires subsurface intervention to remedy a mechanical problem. In addition, the availability of gas lift on the FPSO to optimise production rates has been restricted which will affect production in Q4, however, this system is planned to be operational again in the near future. Meanwhile, the Aje-4 well has been producing in line with expectations.
Preparations for the Aje-5 intervention programme have started with procurement of long lead items and rig contracting. The intervention is scheduled to be undertaken at the end of 2016 to remedy mechanical issues with the completion of the well. The Company understands that, going forward, it is expected that the Aje Field will be producing regularly at target rates of 7,000-9,000 barrels of oil per day once the Aje-5 well is successfully brought back on line which is anticipated to be in early 2017.
The Aje gas development project, which involves the production and sale of gas and liquids from the 163 mmboe Turonian reservoir, is moving through concept definition towards a field development plan and detailed plans for project approval are expected to be submitted during the first half of 2017.
As regards the exploration potential in OML 113 in general, a prospective resource review has almost been completed with the competent person AGR TRACS International and the Company expects to be able to provide a summary of this report in due course.
MX Oil also notes the update on OML 113 announced today by one of the partners in OML 113, Panoro Energy, as part of its third quarter results.
MX Oil's Chief Executive Officer, Stefan Olivier, said:
"Having already received our first income from our investment, we are pleased that there is a clear plan and course of action in place to increase production from the Aje Field in the short term and to develop the potential of OML 113 going forward."
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