Continental Focus, International Reach

OML 113 Production Strong

Tuesday, February 5, 2019

MX Oil issued an update on its activities in Nigeria, specifically on the Aje field on OML 113. During 2018, operations at the OML 113 license continued to make good progress underpinned by the strong performances of the Turonian and Cenomanian reservoirs which are in line with expectations.

Production from the two wells in the Aje field within the OML 113 license area have continued at a very stable rate achieving a total produced volume for 2018 of approximately 1.2 million barrels of oil. Currently the field is producing around 3,150 bpd, of which 158 bpd is net to MX Oil.

The partnership successfully saw its ninth lifting from the Aje field in late November 2018, offtaking approximately 315,000 barrels of oil. The tenth lifting is scheduled to occur in late February.
The continuous oil production of Aje-4 and Aje-5 is above initial expectations and has encouraged the operating partner group to approach RPS Group with the purpose of establishing the viability of additional development of Aje. RPS Group was appointed in late October 2018 to conduct an assessment of the potential development activity associated with the additional upside oil resources. The modelling work conducted to date has reinforced the partners’ view of the potential for new oil wells in both the Turonian and Cenomanian. RPS Group’s work is now expected to conclude in Q1 2019 and will form the basis for a decision on further drilling in 2019 (Phase 2) with a view to a full development project thereafter.
The operating partners continue to assess the viability of these two development phases.
According to estimates revealed by MX Oil, initial development drilling could result in peak oil production rates of 8,000 to 12,000 bpd and the full development drilling increasing production to an estimated 20,000 bpd and 100 Mmcf/d of gas.
The partnership expects that the initial development drilling is likely to require one new development well in the Cenomanian reservoir and one horizontal side track development well in the Turonian reservoir. The full development project will be subject to the availability of project finance in the future to allow a number of new wells to be developed.
The operating partners continue to assess options to meet the funding requirements for the completion of the additional wells expected in Phase 2 and later to the full field development. The operating partners continue to be cognizant of the impracticality of funding projects the size of the Aje development by equity and the partners have commenced steps to procure debt funding for Phase 2 and, potentially, the future stages of development.
In furthering these conversations at the joint venture partnership level and supported by advisers, MX Oil is exploring the option to secure project financing at the asset level.