Production scheduled from April at the TLP-103C well on the Tilapia licence in the Republic of the Congo.
TLP-103C’s upper reservoirs will be targeted by blending the R2 and the Mengo intervals through a double completion in the well.
An initial aggregated flow rate in excess of 1,500 barrels of oil per day is expected over the first 14-18 months.
On that basis, cashflow will be US$1mln per month.
Operation will breakeven with an oil price as low as US$20 per barrel.
What it does
Anglo African holds a 56% working interest in Tilapia, which is currently pumping about 40 barrels per day from the shallow R1/R2 sands.
Republic of Congo state oil company SNPC holds the remaining 44% and also a production-sharing and joint operating agreement with Petro Kouilou (PK), Anglo African’s wholly- owned subsidiary.
Other operators nearby are already producing from the geological formations to be drilled.
Below R1/R2 are the lower Mengo sands, where neighbouring fields have been producing 400-500 barrels daily from wells for some years.
A deeper exploration prospect lies in the Djeno interval, where the adjacent Minsala field produces at a rate of 5,000 bopd.
Finally, there is the relatively untested Vandji Horizon, though this is below the well's target depth of 2,700m.
What the boss says
“We are excited by this funded plan for TLP-103C and are working hard to bring the well into production as soon as possible,” said David Sefton, AAOG (LON:AAOG) executive chairman.
“The development schedule is predicated on the availability of Schlumberger's fracking equipment which we have been informed will be available at the beginning of April.
"Bringing TLP-103C into production is the key to realising the value that we believe has been unlocked by the very successful results from the well.”
- Start of production from the blended R2/Mengo levels
- A new well TLP-104 to test deeper levels at Djeno and Vandji
- Additoinal wells developing the Mengo levels
- In the Mengo, which Sefton believes is a relatively safe bet, careful optimisation might offer the opportunity eventually for between 8-10 wells producing about 400 barrels per day each.
- Production of that magnitude, ie 3,200- 4,000 barrels a day, would make a ‘nicely profitable’ oil business.
Sefton’s background includes various private equity firms, running a seismic business and legal head for Russian oiler Lukoil’s overseas acquisition arm
James Berwick, meanwhile, held senior positions at Ophir Energy and Africa-focused Impact Energy, before the ex-Para and French Foreign Legionnaire was parachuted in as chief executive in January.
It’s not that hard to spot where a business run by two people with experience in acquiring assets and building billion-pound businesses might be headed, quips Sefton.
The good result from TLP-103c should expedite the process and grab the attention of some potentially heavyweight backers.
Anglo African is worth £24.5mln at 10.4p.