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Friday, April 1, 2022
ADM Energy has provided an update on the latest competent person’s report on its Barracuda prospect in OML 141, offshore Nigeria. ADM commissioned Xodus Group to prepare a CPR on the Barracuda area and Xodus has calculated gross, unrisked Prospective Resources for the RSA using standard geological and engineering approaches applied to the data made available by ADME.
Osamede Okhomina, CEO of ADM Energy, said: “Following the rigorous independent analysis from Xodus, the results of the CPR covering the Barracuda prospect in OML 141 show that the prospect is considered prospective and robust for development, with a 2U (P50) case, the NPV10 is +$99mm with an IRR of 45%.
“The report provides a solid foundation to continue to the next stage of technical review which will include further subsurface analysis. We will also look to procure more analogue data from neighboring fields to better understand the trap mechanisms. This additional work will be required to further appraise the asset and will bring us closer to making an investment decision.”
OML 141 lies predominately within the coastal swamp in the Niger Delta in Nigeria. The Barracuda area is located in the northwest of OML 141 in which four exploration wells have previously been drilled. Three wells were drilled in 1967 and the most recent exploration well, Barracuda-4 (BX-1), was drilled in 2007 by Emerald and CNOOC Ltd. This well provides the most relevant data for classifying the resources. Prior to the publication of this CPR by Xodus, the Barracuda RSA was the subject of a CPR undertaken by Ryder Scott in 2016. Xodus has reviewed the available relevant Barracuda data and has not identified convincing evidence as to the presence of light, producible hydrocarbons. There are, however, numerous indications as to the presence of heavy, residual hydrocarbons from past migration and both Ryder Scott (in 2007) and Xodus have concluded that the Barracuda resources should be classified as prospective.
The Company and Xodus identified four potential Agbada Sandstone reservoirs: C, D1A and D1B plus a ‘Deep Prospect’. STOIIPs for these reservoirs were calculated probabilistically. The prospective resource has been assessed separately for each individual reservoir unit and collectively for the combined reservoirs. This approach aligns with that of previous evaluations. In all cases, Xodus used a slab model (a range of constant thicknesses over the fixed areas of reservoir extent).
Xodus based its estimates of reservoir and production parameters on data provided by ADME supplemented with data from nearby analogue fields. Xodus used the same drilling and development schedule as described in the economic model provided by ADME to calculate prospective resource ranges. These represent resources for a first phase development plan which ADME designed to exploit any future discovery in the D1A/B reservoirs. Discovery of larger volumes would require additional phases of development to recover the hydrocarbons.
The economic model supplied by ADME has been reviewed against the RSA scope and provisions to confirm that the economic model represents the RSA accurately. Xodus has used this model with its independent production profiles, and CAPEX and OPEX adjustments to assess the economics of the RSA. For the 2U (P50) case the NPV10 is +$99mm with an IRR of 45% and therefore the prospect is considered to be robust for development, assuming at least 70mmbbl STOIIP is discovered.
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