LGO is pleased to announce that its second development well, GY-683, in the new drilling campaign on the Company's Goudron Field, which was drilled to a total depth of 1,250 feet measured depth and perforated over a 269-foot interval of net oil pay within the Mayaro Sandstone reservoir, is now on production.
The well was completed on 9 April 2017 and is free flowing (i.e. without pumping) with an initial rate of 80 barrels of oil per day ("bopd") of dry oil with API gravity of approximately 44 degrees and initial well-head flowing pressure of 40 psi through a 7/64-inch choke. It is anticipated that once the natural flow period ends, the well will be placed on pump at an initial stabilised rate estimated to be approximately 65 bopd.
Fergus Jenkins, LGO's Chief Operating Officer, commented:
"As with the first well GY-682, this second well has come in ahead of the average expected for initial production rate, giving confidence that the new drilling campaign is on track to substantially increase production from Goudron over the year. The initial free flowing dry oil nature of the well suggests a high quality reservoir and higher than anticipated inflow rates which is a very positive outcome."
GY-683 is the second of a programme of up to 10 infill wells planned for the Mayaro Sandstone in 2017 and early 2018. Each well is forecast to have average initial pumped production rates of 45 bopd of light sweet crude, with the field historically demonstrating low decline rates consistently less than 20% per annum, as evidenced in over 100 existing wells at Mayaro Sandstone level.
The Company has approvals in place for the next three wells in the campaign and is currently evaluating the necessary drilling contracts prior to embarking on the next 3 to 5 wells in the planned programme. With improved oil prices and rising production, on which incremental opex is approximately US$2 per barrel, the Company is continuing to increase its revenue generation.
