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New Country Entry - Weg Naar Zee block, Suriname

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RNS Number : 7433O
Columbus Energy Resources PLC
04 October 2019
 

4 October 2019

COLUMBUS ENERGY RESOURCES PLC

("Columbus" or the "Company")

New Country Entry - Weg Naar Zee block, Suriname

Columbus, the oil and gas producer and explorer with operations onshore Trinidad, is pleased to announce the signature of a Production Sharing Contract with Staatsolie Maatschappij Suriname N.V ("Staatsolie") for the Weg Naar Zee Block, onshore Suriname.

Highlights

·      Onshore block with a discovered resource of 24mmbbl (STOIIP)1 in a proven hydrocarbon province.

·      Large block (900km²) with exploration potential.

·      No signature bonus or upfront consideration.

·      Company can control timing of appraisal/development work. Phase 1 Exploration Period (3 years) consists of G&G studies and 2 Extended Well Tests.

·      Suitable for application of Enhanced Oil Recovery techniques used by Columbus in Trinidad.

·      Complimentary to existing operations and on-strategy.

Leo Koot, Executive Chairman of Columbus, commented:

"The Company is delighted to have signed the Production Sharing Contract with Staatsolie for the Weg Naar Zee block, onshore Suriname ("WNZ"). Staatsolie have been seeking partners with experience in onshore field developments with secondary and tertiary recovery experience to commercialise the discovered oil resources. Columbus's experience in Trinidad will perfectly complement the existing Staatsolie oilfield production operation experience in Suriname.

We would like to thank Staatsolie for their support and assistance in signing the PSC and look forward to working with Staatsolie to make WNZ a success for both parties.  For Columbus, WNZ is a low cost, low risk entry into a block with an estimated 24mmbbl STOIIP in a proven hydrocarbon province, close to existing infrastructure. Provided the results from the extended well tests are as expected, the Company intends to fast track the development of the WNZ oil discoveries."

An interview with Mr Koot, discussing WNZ, will shortly be made available on the Company's website.

Background

Staatsolie, the state oil company for the Republic of Suriname, is the operator of a number of oil fields in Suriname and is also the holder of the Weg Naar Zee block ("WNZ"), onshore Suriname. In January 2019, Staatsolie commenced an Open Door invitation for various onshore opportunities and Columbus applied for a PSC over the WNZ block.  Columbus had expressed an interest in WNZ in mid-2018.

WNZ is an onshore block measuring approximately 900km².  It is located to the west of Paramaribo, the capital city of Suriname, and close to existing oil infrastructure (including the Tout Lui Faut oil refinery, which has sufficient capacity for any WNZ production). 

1  Source: Staatsolie http://opportunities.staatsolie.com/investment-opportunities/onshore-opportunities/

WNZ contains discovered oil in discrete sand bodies having a combined STOIIP of approximately 24mmbbl.  The WNZ area has extensive 2D seismic data and exploration well information (some with  well test  data) which will assist in the exploration, appraisal and future development of hydrocarbons from WNZ.

Production Sharing Contract

The Company has signed a Production Sharing Contract with Staatsolie for WNZ (the "PSC").  The main terms of the PSC are:

Issue

PSC

Comment

Operator:

Columbus


Participating Interest:

Columbus 100%

Staatsolie's has the right to back in for up to a 50% Participating Interest.

Staatsolie intends to participate (up to 50%) in each Commercial Field that is developed. Staatsolie will fund its relevant percentage share of all costs (including back costs) associated with each Commercial Field from the date of approval of the relevant Development Plan.

Exploration Period:

Phase 1: 3 years.

Phase 2: 2 years.

Phase 3: 2 years.

Columbus can elect to, but is not required, to enter into Phase 2 or Phase 3.

Minimum Work Obligation ("MWO"):

Phase 1:  G&G studies and an Extended Well Test of at least two separate stratigraphic oil bearing units.

Phase 2: 100 km of 2D seismic data and drill 3 Exploration Wells.

Phase 3: drill 5 Exploration Wells.

Columbus can use the revenue from up to 2 Extended Well Tests during the Exploration Phases to help fund exploration activities.

 

Minimum cost of MWO:

Phase 1: US$250,000.

Phase 2: US$500,000.

Phase 3: US$500,000.


Development Period:

 

25 years


Cost Oil:

Up to 85% of Gross Production


Profit Oil:

Columbus entitled to a share of available Profit Oil ranging from 80% (when the R factor is <1) to 40% (when the R factor is >2).


Marketing of oil:

Columbus has the right to market and sell its Participating Interest share of oil without restriction.


 



 

Information on WNZ and Suriname

The WNZ block has been subject to previous exploration and appraisal activity, namely by Elf Petroleum in 1968 and Staatsolie in 1989-1991 and 2007-2013.  Those activities resulted in the discovery of a number of discrete oil bearing sand bodies  with a combined STOIIP estimated by Staatsolie of circa 24mmbbl. The oil bearing sands belonging to the Paleocene age Saramacca sandstone units, are similar to the producing Tambaredjo, Tambaredjo North West and Calcutta Fields, 55 KM to the east of the WNZ. WNZ has circa 115km of existing 2D seismic line data and benefits  from a widespread dataset of approximately 68 wells. WNZ includes additional exploration opportunities in the form of basin margin structural and stratigraphic traps in both the Paleocene and Cretaceous age sediments.  

 

WNZ is located in the onshore extension of the Guyana-Suriname sedimentary basin. Staatsolie has produced over 100 million barrels from its onshore oil fields in Suriname, including the Tambaredjo, Calcutta and Tambaredjo North-West fields. The combined fields currently produce around 16,000 BOPD. Staatsolie  also operates the Tout Lui Faut oil refinery.  Suriname has a number of offshore licenses adjacent to the world class Stabroek license, where multiple discoveries are under development with an estimated recoverable resource of 6 billion oil-equivalent barrels.

 

Oil has been previously found and tested in WNZ's Paleocene age sands in the Lower and Middle Saramacca. These are high quality reservoir sands at shallow depths (less than 1200ft) with reasonable interval thickness of between 14ft to 30ft. 

 

In 2019/2020, Columbus intends to conduct a petrophysical update of the existing well data, perform a detailed reservoir evaluation study and perform an Extended Well Test ("EWT") of at least two separate stratigraphic oil bearing zones, with the intent of submitting a development plan for WNZ including those oil sands deemed commercial as soon as practical.

 

 

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Qualified Person's statement:

The information contained in this document has been reviewed and approved by Stewart Ahmed, Chief Technical Officer (Trinidad), for Columbus Energy Resources plc. Mr Ahmed has a BSc in Mining and Petroleum Engineering and is a member of the Society of Petroleum Engineers. Mr Ahmed has over 33 years of relevant experience in the oil industry.

Contact Information

Columbus Energy Resources plc

Leo Koot / Gordon Stein

+44 (0)20 7203 2039

VSA Capital Limited

Financial Adviser and Broker

Andrew Monk / Andrew Raca

+44 (0)20 3005 5000

Beaumont Cornish Limited

Nominated Adviser

Roland Cornish / Rosalind Hill Abrahams

+44 (0)20 7628 3396

Celicourt Communications

Public and Investor Relations

Mark Antelme / Jimmy Lea

+44 (0)20 8434 2643

 

Notes to Editors:

Columbus Energy Resources Plc is an oil and gas producer and explorer focused on onshore Trinidad and Suriname. The Columbus Energy group has five producing fields, two appraisal/development projects and a highly prospective exploration portfolio in the South West Peninsula ("SWP"), which lies in the extreme southwest of Trinidad and consists of stacked shallow and deep prospects. Columbus is cashflow positive and aims to create transformational growth by developing its portfolio in a capital efficient and disciplined manner.

 

Columbus is guided by the following core values; safe and sustainable, stronger together, creative excellence, positive energy, totally trusted and personally responsible.

 

The Company is led by an experienced Board and senior management team with supportive shareholders and intends on leveraging its expertise and experience to build an attractive and diversified portfolio of assets across South America in order to build an oil production led South American exploration business.  To find out more, visit www.columbus-erp.com or follow us on Twitter @Columbus_ERP.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rn[email protected] or visit www.rns.com.
 
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Price: 4.1

Market: AIM
Market Cap: £34.15 m
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