Advance Energy PLC (LON:ADV) said drilling of the Buffalo-10 well is expected to commence in late October 2021.
A jack-up drilling rig for the Buffalo-10 well has been selected, the oil and gas company said.
READ: Advance Energy says it’s delighted with progress towards new Buffalo well
The operator, Carnarvon Petroleum Limited, has agreed on a letter of intent with the rig contractor and a formal contract is now being finalised.
The final well timing will be subject to securing remaining drilling support services and equipment, and joint venture and regulatory approvals, all of which are in progress and are not expected to impact the well's expected commencement date, the firm said.
“We are delighted to hear this progress from Carnarvon, which signals a key milestone in the process of re-developing the Buffalo field. It is also important to note that the selected rig will have drilled four wells before arriving on-site at the Buffalo field, which means that the crew and the rig operations will be at their most efficient,” said Advance Energy's chief executive Leslie Peterkin.
“As a reminder to shareholders, the drilling of this well is transformational to Advance Energy, representing a potential material value catalyst for the company. In the case of the 2C resource being established as reserves, there is potential to deliver a gross production rate of around 40,000 barrels per day (20,000 barrels per day net to Advance Energy) by the end of 2023, which in this current pricing environment would deliver exceptionally strong cash flow and compelling rates of return.”