TIDMSAVP
RNS Number : 7364L
Savannah Petroleum PLC
23 April 2018
23 April 2018
Savannah Petroleum PLC
("Savannah" or "the Company")
Bushiya Oil Discovery
Encouraging start to multi-well drilling campaign in Niger
Savannah Petroleum PLC, the British independent oil and gas
company focused around oil and gas activities in Niger and Nigeria,
is pleased to announce the result of the Bushiya-1 exploration well
as an oil discovery. Bushiya-1 is located on the R3 portion of the
R3/R4 PSC Area in the Agadem Rift Basin ("ARB"), south east
Niger.
Well Result
Preliminary results based on the interpretation of the available
data set (which includes wireline logs, fluid sampling and pressure
data) indicate that the well has encountered an estimated 10 metres
of net oil bearing reservoir sandstones across two intervals (3m
and 7m) in the primary Eocene Sokor Alternances objective. Wireline
logs indicate the reservoir properties in both sections to be of
excellent quality and the available pressure data indicates light
oil to be contained within both intervals, which is consistent with
offset wells along trend and the depth/API trend observed across
the basin. The fluid sampling capabilities of the wireline testing
equipment available to Savannah onsite has proven to be limited.
Therefore, while an oil sample has been taken and returned to
surface from the shallower horizon, an attempt to extract an oil
sample from the deeper horizon was un-successful. Following
industry standard guidelines, Savannah will not consider the deeper
section as proven pay until the successful completion of well
testing operations.
Drilling Performance
The well was drilled by Rig GW 215 to a total measured depth of
2,200 metres, and encountered the main objective intervals at, or
near, their prognosed depths. The well took a total of 16 days to
reach target depth, and all operations are expected to be completed
within 25 days of spud (versus an original expectation of
approximately 35 days). Well costs are therefore expected to be
under budget. Drilling conditions were benign with no significant
geological or drilling hazards encountered.
Next Steps
Bushiya-1 is currently being suspended for future re-entry.
Consistent with standard industry practice in the ARB a production
test is expected to be performed on the well as part of a batch
campaign using a dedicated workover/well testing rig once the
results of the other two exploration wells in the current drilling
campaign are available. Savannah does not expect to provide a
discovered resource volume estimate for Bushiya until following the
completion of the well testing program.
Following well testing, Savannah expects to install a downhole
completion assembly to Bushiya-1 so as to enable it to function as
a potential production well in the future.
Amdigh-1
Rig GW-215 will now move to the Amdigh well site, located 6km
from Bushiya, where it will prepare to spud the Amdigh-1
exploration well. Construction of the Amdigh-1 well pad has been
completed, and the well site is ready to accept the rig. The move
is anticipated to take between 10-15 days, and the Company will
provide an update upon spud of the Amdigh-1 well.
Similar to the Bushiya-1 well, the Amdigh-1 well is designed to
evaluate potential oil pay in the Eocene Sokor Alternances as the
primary target, with the secondary target of potential oil pay in
the Eocene-Oligocene Upper Sokor being considered as potential
upside. Savannah's competent person, CGG Robertson, has assessed
total mean un-risked recoverable resources at Amdigh of 39 mmbbls.
Drilling and logging operations are expected to take approximately
35 days, and the well is planned to be drilled to a total measured
depth of 2,576 metres.
Foumakoye Gado, Niger Minister of Energy and Petroleum,
said:
"The development of the oil and gas industry in the Agadem Rift
Basin is expected to be transformative for both the Diffa region
and Niger as whole and is a national priority for our country. We
are therefore delighted that the Bushiya-1 well has discovered oil,
and we welcome Savannah as an oil resource holder in our country.
We look forward to working closely with Savannah and other
stakeholders to assist in the commercialisation of Bushiya and any
other additional discoveries made by the Company over the course of
the coming years. We hope and expect Bushiya-1 to be the first of
many drilling successes for Savannah in Niger."
Steve Jenkins, Chairman of Savannah Petroleum, said:
"The discovery of light oil at Bushiya-1 is a significant
milestone for Savannah and our Niger project. As a geologist, I am
highly encouraged that the well provides further validation for our
original thesis for entering the ARB - being that significant
portions of Savannah's acreage have similar geology to that of the
neighbouring Agadem PSC area, which has proven so prolific for the
Joint Venture Partnership led by China National Petroleum
Corporation.
In simple terms, I believe the well has demonstrated all of the
necessary ingredients for repeatable exploration success to exist
in the R3 Area and look forward with encouragement to the remaining
wells in our initial campaign, being Amdigh-1 and Kunama-1. I would
also highlight the extensive prospects and leads inventory we have
in the wider R3 license area, which we expect to continue to high
grade for potential inclusion in future drilling campaigns."
Andrew Knott, CEO of Savannah Petroleum, said:
"This morning's announcement marks an encouraging start for our
multi-well drilling campaign in Niger. I would like to take the
opportunity to remind our stakeholders of our Niger exploration
strategy. We are focused around discovering and aggregating a
series of oil fields to create and/or participate in hub-and-spoke
production development(s). We are not seeking to "re-invent the
wheel". We are simply seeking to discover fields in our permit
areas of similar size to the established ARB discovered field
resource volume distribution by employing similar analytical
techniques, equipment and service providers to those that have been
used to so much success in other permit areas elsewhere in the ARB
in recent times.
I feel it is important for us to thank our local community and
governmental stakeholders as well as our operations and subsurface
teams and oil service company partners for the work and support
that the Company has received to reach this point. It has been a
true team effort. I would like to highlight the stable and
consistent business environment in Niger as a major enabler of the
success we have achieved to date. Further, I think it is important
to highlight the cost discipline and operational successes we have
consistently demonstrated. Our drilling operations have followed
the seismic and FTG survey acquisition activities we have conducted
in prior years in the ARB and I am very pleased that all of these
operations have come in at, or under, budgeted levels and
timelines.
To summarise, while there will undoubtedly be ups and downs
going forward, our Niger project is clearly entering an exciting
time. As a Board and Management team, we firmly believe that if we
execute our ARB strategy successfully we will obtain our ultimate
objective of realising significant material value for all of our
Niger project's stakeholders. We look forward to providing further
updates in the future as we progress our work program."
Steve Jenkins, Chairman, has read and approved the technical
disclosure in this regulatory announcement in his capacity as a
qualified person under the AIM Rules. Mr Jenkins is a qualified
geologist with 35 years' experience in the oil and gas industry. He
holds a B Sc (Hons) in Geology and a M Sc in Petroleum Geology. Mr
Jenkins is a Fellow of the Geological Society.
For further information contact:
Savannah Petroleum +44 (0) 20 3817 9844
Andrew Knott, CEO
Isatou Semega-Janneh, CFO
Jessica Hostage, VP Corporate
Affairs
Strand Hanson (Nominated Adviser) +44 (0) 20 7409 3494
Rory Murphy
James Spinney
Ritchie Balmer
Mirabaud (Joint Broker) +44 (0) 20 7878 3362
Peter Krens
Ed Haig-Thomas
Hannam & Partners (Joint Broker) +44 (0) 20 7907 8500
Neil Passmore
Alejandro Demichelis
Sam Merlin
Celicourt Communications +44 (0) 20 7520 9266
Mark Antelme
Jimmy Lea
The information contained within this announcement is considered
to be inside information prior to its release, as defined in
Article 7 of the Market Abuse Regulation No.596/2014, and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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