Providence Resources Plans to Reinstate Lost Production in GOM
Providence Resources has provided an update on several positive developments within its portfolio of producing oil and gas interests in the Gulf of Mexico. These developments will not only reinstate lost production, but will also lead to a meaningful increase in daily production rates, with production rising by an estimated 900 BOEPD net to Providence by mid Q3, 2009. The Company is also reviewing a number of new drilling opportunities in the region, which could see the Company taking advantage later in the year of the recent reduction in rig rates.
Re-instating Production Impacted by Hurricanes
As previously announced, last September's Hurricanes Gustav and Ike seriously impacted production in the area, including Providence's
production from its Ship Shoal 253 and High Island A-268 producing fields in addition to delaying the start-up of the new Galveston A-155 gas field by around six months. The cumulative impact on from this lost/deferred production is estimated at approximately 500 BOEPD
net to Providence.
Installation of the production platform at Galveston A-155 was performed in January 2009 and the wellbore completion was carried out
during April 2009 using the Hercules 350 jack-up drilling rig. A production flow-line will now be laid in May to connect the platform to the gas export infrastructure, with first gas production now expected in early Q3 at rates of up to c. 200 BOEPD net to Providence.
At Ship Shoal 253, all major remedial works on the topsides production facilities and platforms have now been effectively completed with some remaining subsea pipeline work still to be finalized. Repairs to third party export pipelines have taken longer than planned and it is therefore expected that production will re-commence in mid Q3 at a rate of 250 BOEPD net to Providence.
At High Island A-268, production re-commenced in Q1 following the re-instatement of the main third party gas export line that was damaged. Plans are now being finalised to hook-up the HI A-268 wells (currently producing c. 30 BOEPD) to a compressor during Q2 to
further maximize the field's production rate and reserves potential. In addition to the current producing zones, there are also gas bearing zones behind pipe in each of the wells which will be accessed in the future once the current producing zones have been fully depleted.
Enhancing Production Rates & Evaluating Drilling Opportunities
At Vermillion 60, a significant recompletion program has been agreed for Q2 to produce from a new zone that should see Providence's net
production increase from 25 BOEPD to some 300 BOEPD. This work is expected to take place within the next six weeks.
At Main Pass 19, a work-over was performed on a well in the field during Q1 to allow the well to produce at higher oil rates. The result was that gross oil production from this well increased from a production rate of c. 5 BOPD to an initial stabilised rate of c. 140 BOPD.
In addition to work programmes at its existing producing assets, the Company has a number of drilling opportunities which are currently
being examined for potential activity later this year depending on partner agreement and rig availability and rates.
Speaking today, Tony O'Reilly, Chief Executive of Providence, said, "Over the past two years, we have built up a sizeable portfolio of
oil and gas assets in the Gulf of Mexico. Unfortunately, last year's hurricanes severely impacted our production rates and development
plans, but I am pleased that we have been able to react in a timely manner to re-instate production, as well as to bring on line new
opportunities. The cumulative impact of the above measures should result in our daily production rates from our Gulf of Mexico
portfolio increasing by some 900 BOEPD by mid Q3.
"Looking further ahead, Providence will continue to optimise its asset portfolio as well as looking at new opportunities in the region. On the drilling front, the Company is reviewing its extensive list of opportunities in light of the significant reduction in rig rates over the recent months."
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