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Premier Oil enjoys more appraisal success with Zama offshore Mexico

The latest results bode well for the future recoverable volumes from the discovery, which was previously estimated to host 1.2bn to 1.8bn barrels of oil-in-place

oil and gas operations
Sidetrack drilling has given more evidence of Zama's 'world class' status

Premier Oil PLC (LON:PMO) has enjoyed further success at the Zama discovery, with the latest appraisal well providing further confirmation of the project’s ‘world class’ calibre.

The Zama-2ST1 well, a sidetrack off the previously drilled Zama-2 well, yielded a combined flow rate of 7,426 barrels of oil per day from two separate tests within a perforated 248 feet zone.

Production rates were, however, restricted to manage risks of sand production and Premier highlighted that analysis of the result indicates “a prolific reservoir”.

READ: Premier Oil puts growth projects on agenda after record year of production

In all, the Zama-2 sidetrack cut some 873 feet of gross oil bearing reservoir, achieving a 70% net-pay-to-gross-pay ratio.

"We are very pleased by the productivity demonstrated by this well and we continue to collect further evidence that Zama has a world-class reservoir with excellent quality and well-connected sands,” said Tony Durrant, Premier chief executive.

“This has positive implications for the expected ultimate recovery from the field and will help us to optimise the field development.”

The drill rig will now move on to the location of the Zama-3 appraisal well, which aims to confirm lateral reservoir continuity and quality in the southern part of the field.

Premier highlighted that the drill programme is ahead of schedule and under budget.

It holds a 20% non-operated interest in Block 7 which, in the shallow water Sureste Basin in the Gulf of Mexico, is host to the Zama discovery.

Prior to appraisal drilling, Zama was estimated to contain some 1.2bn to 1.8bn barrels of oil-in-place, with recoverable resource estimates pitched at that time at 400-800mln barrels.

In Tuesday morning’s deals, Premier shares moved 2.88% or 2.92p higher to trade at 104.42p.

Quick facts: Premier Oil PLC

Price: 102.65 GBX

Market: LSE
Market Cap: £859.69 m

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