ADM Energy PLC (AIM:ADME, ETR:P4JC) chief executive Osamede Okhomina has described a new competent persons report (CPR) for the Barracuda asset offshore Nigeria as “a solid foundation to continue to the next stage of technical review”.
The report, produced by consultant Xodus, determined that there are numerous indications as to the presence of heavy, residual hydrocarbons and that the Barracuda resource estimates are to be considered as prospective. Xodus did not, however, identify convincing evidence as to the presence of light, producible hydrocarbons.
Xodus provided a probabilistic view of the potential scope of the prospective resources across four reservoir zones - ‘C’, ‘D1A’, ‘D1B’ and the ‘Deep Prospect’ – with gross volumes estimated in the range of 275mln to 574mln barrels, with the P50 (50% probability) estimate marked at 397mln barrels.
ADM noted that the prospective barrels would represent the areas used for a first phase development plan, designed to exploit any future discovery in the D1 reservoir zones, and that the discovery of larger volumes would require additional development phases.
The consultant determined that D1A, containing potentially 25mln barrels, would have the highest chance of success (CoS) at 30% whilst the 51mln barrel Deep Prospect was deemed to have a 25% Cos. The C3 prospect was estimated to be the largest, at 193mln barrels and it has a 15% CoS.
Based on an economic model supplied by ADME, Xodus estimated a discounted net present value of greater than US$99mln with an internal rate of return of 45% - which, on the basis of greater than 70mln barrels of oil being discovered in the future, led the consultant to consider Barracuda to be “robust for development”.
"Following the rigorous independent analysis from Xodus, the results of the CPR covering the Barracuda prospect in OML141 show that the prospect is considered prospective and robust for development,” Okhomina said.
"The report provides a solid foundation to continue to the next stage of technical review which will include further subsurface analysis.
“We will also look to procure more analogue data from neighbouring fields to better understand the trap mechanisms. This additional work will be required to further appraise the asset and will bring us closer to making an investment decision."