Leni Gas & Oil announced further petroleum lease acquisitions and progress with other projects in Trinidad.
LGO has reached agreement to acquire the subsurface rights of several additional land leases in the Cedros Peninsula of SW Trinidad, totaling 937 acres. These leases, which lie immediately adjacent to the Company's producing interests at Icacos, will be combined with the 815 acres already leased earlier in 2011. A Private Petroleum License will be applied for shortly. These leases require a minimum work program of geological studies and have no fees other than net production royalties in the event of success.
The Icacos License covers a total of 1,960 acres; which with the new 100% owned leases, gives LGO a total interest in over 3,700 acres. The Company considers this to be a sufficient area to initiate the detailed planning for geophysical surveys; expected to consist of an airborne gravity and magnetic survey in 2012, followed by 2D seismic data and exploration drilling to explore for the Herrera Formation target. This area lies less than 15 kilometers from the Venezuelan coast where the equivalent Mio-Pliocene play is proven and has produced close to a billion barrels over the last 80 years (AAPG, Memoir 74). By contrast very little exploration for the Herrera Formation reservoirs has so far been undertaken in the Cedros Peninsula.
LGO envisages an integrated approach to exploration across the peninsula. Geological and geophysical studies will be combined with data from existing wells in Trinidad and Venezuela. Exploration drilling could be undertaken in 2013 and is expected to involve at least one well to a depth of at least 10,000 feet.
Icacos Field produces from the Upper Cruse reservoir at an average depth of 2000 feet. Production currently coming from three open wells and has averaged 35 bopd (gross) to date in 2011. LGO holds a 50% interest in the Icacos License. Potential exists to re-open some of the other 14 wells drilled within the Icacos leases and to explore further for small fields at the Cruse level as well as the deeper Herrera.
Elsewhere in Trinidad; the farm-in to the Advance Oil Moruga North leases has been substantially progressed and it is hoped to drill the first of the three exploration wells in first quarter 2012. A location for the first well has been agreed, environmental permits have been applied for and the contracting of a rig and well services has been initiated. An update on this program will be issued later in November.
Progress on the assignment of the Goudron Area Increased Production Service Contract continues and the Company is optimistic that field operations can be commence in early 2012.
Neil Ritson, LGO's Chief Executive commented, "Trinidad provides a major growth area for LGO which combines early production revenues from a large number of existing wells, with very significant exploration upside in a proven hydrocarbon province. We are pleased to report excellent progress and are optimistic about the prospects for 2012."
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