LGO Energy PLC (LON:LGO) expects to receive approval for the first well in a new drilling campaign in Trinidad before January after submitting a formal request to start work on the first infill well on the Goudron Field.
It has outline approval for 45 shallow infill wells tapping the Mayaro Sandstone, which are expected to intercept the oil at between 650 and 1,050 feet.
Previous drilling measured the net oil pay itself at around 200 feet per well.
The wells take around 12 days to drill and complete at an estimated to cost of US$500,000 each.
LGO’s local subsidiary, Goudron E&P, has submitted formal requests to drill to the Petroleum Company of Trinidad and Tobago and the Ministry of Energy and Energy Industries. The approval process is typically taking around two weeks.
“We anticipate having the approvals in place before January and will then start the drilling as soon as practical,” said LGO chief operating officer Fergus Jenkins.
“With the current oil price and expected cost of drilling the economic payback on the incremental production from Mayaro Sandstone wells is expected to be less than 12 months."
The shares rose 15% to 0.153p.
Back to normal
Work on the ground is restarting after a successful refinancing, which was concluded last week.
Chief executive Neil Riston told Proactive’s Andrew Scott: “We are very keen to get back to normal operation.
“We have a new, affordable loan in place that frees up cash flow. It also frees up money we have already in Trinidad in local currency.”
He said applications for up to 10 of the 45 approved wells will be filed over the “next weeks and months”.
“Things are beginning to take shape for normal operation,” Ritson added.
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