Petroleum Africa
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Monday, May 4, 2015
Oando Energy Resources (OER) saw its Q1 capital expenditures on OMLs 60 to 63 totaled $20.8 million. Capital expenditures included $10.8 million spent on development drilling and completion activities in the Ogbainbiri Deep 4 well and $4.6 million was spent on pipeline upgrades. In addition, the company spent another $5.4 million on other capital maintenance projects, moveable assets and geophysical exploration studies.
For the remainder of the year the company estimates that $35.6 million will be expended on crude oil related projects and $24.1 million on gas projects in the OMLs 60 to 63 areas. The anticipated crude oil development expenditures include significant investment in environmental and safety projects, new development drilling, and completions and recompletions of previously drilled wells. Planned natural gas projects consist of drilling and completing new wells, along with enhancements to natural gas facilities and pipelines.
In Q1, $1.6 million was spent on pipeline and crude oil facility costs to allow for new production from the Qua Ibo field. OER commenced production to build inventory from this field near the end of February and anticipates first sales to occur in Q2. Throughout 2015, the company has estimated $0.6 million in capital expenditures for facility enhancements.
OER incurred $2.4 million in capital expenditures at Ebendo, which included the pipeline repairs and maintenance and drilling site preparation costs. Throughout the remainder of the year an estimated $7.7 million will be spent for facility and pipeline overhauls and enhancements.
At OML 125 during Q1 OER incurred $12.8 million of capital expenditures Q1 related to gathering and transportation infrastructure enhancements and facility maintenance. The enhancements included $11.5 million spent on Abo phase 3 gathering and transportation construction and maintenance, along with $1.3 million on its FPSO on capital maintenance.
In 2015 OER estimates that $67.1 million of capital expenditures being incurred on the OML 125. The planned expenditures include gathering system construction projects, drilling and completion of ABO 12 Upper and ABO 13, along with safety projects and extending the life of the FPSO. The company has a funding arrangement with the operator of OML 125 that allows it to defer the payment of cash calls monthly and allows the operator to take delivery and sell the its share of crude oil from the block to settle any outstanding cash call. This arrangement does not result in an adjustment to the company’s working interest.
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