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Wednesday, March 4, 2015
Madagascar Oil saw cumulative oil production reach 173,351 barrels from a cumulative steam injection of 910,017 BWE as of the end of February. As of February 28 there were 90,780 barrels in storage at the SFP available for sale to the domestic Madagascar market. The company is working jointly with state utilities supplier, Jirama, to plan a test of Tsimiroro crude as a HFO feedstock into the Antananarivo, Mandroseza power station. This test is planned to follow the refurbishment of the Mandroseza power generation equipment. A truck load of Tsimiroro crude is also planned to be sent to two separate domestic Madagascar industrial end-users in the coming weeks, also for testing purposes. It is hoped that continuous sales contracts will follow successful outcomes of all of these tests.
Subject to the approval of the Tsimiroro Development Plan (TDP) and the award of an Exploitation Mining Title, Block 3104 PSC will enter into its exploitation period, with a minimum term of 25 years. The company continues to have an active and very positive dialogue with OMNIS, the Ministry to the Presidency of Mines and Petroleum and also representatives of the office of the President of Madagascar, with regard to the approval process for the TDP. Phase 1a of the TDP will fully develop the geological compartment containing the existing SFP area. It is planned that long-lead orders will be placed for drilling under Phase 1a of the TDP and SFP facilities upgrade equipment/materials for a planned 2015 work program following approval of the TDP.
Based on expected six to nine month delivery times for these long-lead items, Phase 1a development drilling could commence as early as late-2015, adding to production from the existing SFP wells.Phase 1b will follow Phase 1a and is designed to develop an additional geological compartment to allow sales volumes to reach 10,000 bpd.
The TDP described a range of thermally effective Oil in Place derived by Madagascar Oil for the Block 3104 Tsimiroro Main Field, Amboloando heavy oil resource. This range is 1.33 billion barrels on the low side and 2.45 billion barrels on the high end range. These ‘thermally effective oil in place” figures are internal numbers based on the Main Field Amboloando reservoir geological interpretation completed in 2014. The definition of thermally effective oil-in-place utilizes a 50% oil saturation cut-off and criteria over the presence flow barriers in the oil column. This latest interpretation utilizes the 2014 petrophysical dataset from all wells with available log data. It is planned to further improve the Tsimiroro Main Field Amboloando reservoir geological model in 2015 using the results of the Development Evaluation Program (DEP) work. This work consists of 30 new fully cored and logged DEW, the completed ground magnetometer survey for reservoir scale igneous dyke imaging, field geological surveying and improved fluvial sand-body modeling techniques.
The first of the 30 development evaluation wells (DEW) was drilled in February using Madagascar Oil’s drilling rig. The well (DEW15-11) was fully cored over the target oil bearing reservoir section and drilled successfully to the planned total depth of 265 meters and was also designed to test the capabilities of locally sourced drilling and core-handling crews ahead of the main DEP. The remainder of the wells will be drilled in the dry season which is expected to commence in late March/early April 2015. It is anticipated that the DEW well campaign will complete in Q3 2015.
The new application of the ground magnetometer survey method of igneous dyke detection was extended over parts of the Phase 1 and Phase 2 intended development areas under the TDP in September-November 2014 with the processed data yielding clear imaging of the dyke network which compartmentalizes the reservoir. This should allow the steam flood pattern of wells to be aligned with the dyke matrix.The DEW and ground magnetometer survey data will be incorporated into the revised geological modeling to advance reservoir development planning beyond the Phase 1a development area.
Separate exploration reports were completed on each of blocks 3105, 3106 & 3107, by UK-based Subsurface Consultancy, ERCL. The reports summarize completed subsurface work including the revised geological interpretations and also describe the hydrocarbon prospect and lead inventory of each block. Exploration work programs to mature the prospectivity are described in each report. The company formally requested a two year extension of the exploration periods for these blocks. This formal request was made ahead of the scheduled end date of the current exploration periods of 14 December 2014 and the Company is hopeful of receiving these extensions in the near future.
Over on the Block 3102 (Belmolnga) License the operator, Total E&P Madagascar, presented the 2015 annual work program and budget to the Madagascar authorities and to Madagascar Oil in December 2014. The 2015 work program is aimed at maturing leads on the block to plan for a seismic acquisition program in 2016. The proposed 2015 budgeted work is fully covered by the terms of the existing Total carry of the company’s costs.
Robert Estill, Chief Executive Officer of Madagascar Oil, commented: “We continue to make good progress on Steam Flood Pilot operations and the data we are gathering is proving to be extremely useful as we move towards the development phase of the Block 3104 Tsimiroro field. Our ongoing Development Evaluation Program will provide further important data to allow us to determine the optimal drilling locations for our development phase. We have had extensive and very positive discussions over the past few months with OMNIS and Madagascar Government representatives on our Tsimiroro Development Plan. As this is considered by the Madagascar authorities to be a project of national state importance, we fully understand the cautious and measured approach they are taking and are grateful for the extensive resources they are devoting to this process.”
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