Exploration projects offshore Guyana and Suriname continue to see strong investment as industry players seek out ‘advantaged barrels’, Westmount Energy Ltd told investors as it released full-year results.
‘Advantaged barrels’ are characterised as having ‘low breakeven costs, low carbon emissions and potential for rapid commercialisation.’ Typically, these are projects where high volumes can be recovered per well, allowing projects to be commercially productive and retain a comparatively smaller footprint.
“Drilling activity in the Guyana-Suriname basin continues to accelerate driven by the industry's focus on 'advantaged barrels' as a result of the unique combination of prospect sizes, reservoir quality, low carbon intensity and low breakeven metrics (US$25/bbl-US$35/bbl) that are available offshore Guyana,” chair Gerald Walsh.
Guyana was 2020’s fastest-growing economy, at 40%, he noted, driven in part by the oil industry as Exxon rapidly ramped up production at the Liza field in the Stabroek block. The field reached a plateau rate of 120,000 bopd from one floating production vessel and a second vessel is due to come online in early 2020 (there’s believed to be scope for up to at least six vessels), and several separate follow-on developments are also envisaged.
Exxon has driven the industry activity to date though the likes of Hess, Chevron, Total and Qatar Petroleum now also involved, along with a number of private and small-cap partners.
Westmount, which is invested in minority interests in multiple projects offshore Guyana, noted that high-quality reservoirs were identified in the first drilling campaigns for the Kaieteur and Canje blocks but no standalone commercial discoveries were confirmed.
The campaign unearthed the Tanager-1 discovery which is estimated to contain some 65.3mln barrels of oil resources but will not meet the threshold needed for a standalone commercial development.
“While the initial drilling outcomes from the Westmount portfolio have yet to deliver a standalone commercial discovery, the results to date provide encouragement and must be viewed in the context of initial 'large step-out' wells evaluating giant stratigraphic prospects while seeking to establish the perimeter of the multiple play fairways both to the northeast and southwest of the prolific Stabroek block,” Walsh added.
Analysis is presently underway to integrate results from the drill campaign with newly acquired sub-surface data into regional petroleum system models. The plan is to ‘high-grade’ potential targets for follow-on drilling.
Preparations are underway, including applications for environmental authorisations, for the next planned phase of drilling slated at the Canje and Kaieteur blocks from 2022 onwards.
The company ended its financial year, on June 30, with a cash balance of £1.2mln and was debt-free following the repayment of convertible loan notes.