LGO Energy PLC Successful well GY-682,Goudron Field (2125Z)

TIDMLGO

RNS Number : 2125Z

LGO Energy PLC

13 March 2017

For Immediate Release

13 March 2017

LGO ENERGY PLC

("LGO" or the "Company")

Successful well GY-682, Goudron Field, Trinidad

LGO, the oil and gas company with reserves, resources and production onshore Trinidad, is pleased to announce that its first development well GY-682 in the new drilling campaign on the Company's Goudron Field, reached total depth ("TD") at 1,145 feet measured depth on 8 March 2017. Electric log interpretation of the Mayaro Sandstone target interval confirms the presence of oil over an estimated net reservoir thickness of 408 feet. It has been decided to perforate and place on production 273 feet of the best net oil pay within the Mayaro reservoir.

Well GY-682 will shortly be put on production with a downhole pump and a stabilised production rate will be established, at which point the Company expects to announce the average initial flow rate. GY-682 is one of a programme of planned Mayaro infill wells, each of which is forecast to have average initial production rates of 45 barrels of oil per day ("bopd") of light sweet crude, with low decline rates. The well was drilled on time, in 5 days, without incident and is expected to be on budget; costing US$500,000.

Neil Ritson, LGO's Chief Executive, commented:

"I am delighted that, having sorted out the balance sheet issues in 2016, we are back to development drilling at Goudron. The first well has been a success, having drilled to TD in under a week and is showing the expected net oil pay. Production will start shortly, adding to our production base and the rig will move to the next well site. After months of restructuring, we now have momentum back in the business."

The next well, GY-683, in the shallow infill program will be spudded shortly. Three additional wells have been now approved by the Ministry of Energy and Energy Industries as part of the ongoing development in which 45 wells have already received environmental approvals.

LGO has 11.8 million barrels ("mmbbls") of Proven and Probable Reserves ("2P") in the Goudron Field and is currently producing light sweet oil with an average API gravity of 37 degrees. In addition to its reserve base LGO has significant low risk, onshore upside in the Trinidad portfolio including 22 mmbbls of most-likely ("P50") Contingent Resources ("2C") in the Goudron Field and an estimated gross P50 unrisked oil in place of 1.3 billion barrels in the South West Peninsula leases.

Qualified Person's Statement:

The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Chairman for LGO Energy plc, who has over 38 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers (SPE), an Active Member of the American Association of Petroleum Geologists (AAPG) and is a Fellow of the Geological Society of London (FGS).

Enquiries:

 
 LGO Energy plc                           [phone] 
 Neil Ritson/Fergus Jenkins 
 
 Beaumont Cornish Limited                 [phone] 
 Nomad and Joint Broker 
 Rosalind Hill Abrahams/Roland Cornish 
 
 FirstEnergy Capital LLP                  [phone] 
 Joint Broker 
 Jonathan Wright/David van Erp 
 
 VSA Capital                              [phone] 
 Financial Advisers 
 Andrew Monk/Andrew Raca 
 
 Camarco                                  [phone] 
 Public and Investor Relations 
  Gordon Poole/Billy Clegg 
 

Glossary:

 
 2C                    most likely or P50 Contingent Resources 
                        according to PRMS 
--------------------  --------------------------------------------- 
 2P                    the Proven plus Probable Reserves 
                        according to PRMS 
--------------------  --------------------------------------------- 
 API gravity           a measure of oil density. API gravity 
                        is the inverse measure of a petroleum 
                        liquid's density relative to that 
                        of water, which is designated with 
                        a value 10. If one petroleum liquid 
                        is less dense than another, it has 
                        a greater API gravity 
--------------------  --------------------------------------------- 
 electric logs         tools used within the wellbore to 
                        measure the rock and fluid properties 
                        of the surrounding formations 
--------------------  --------------------------------------------- 
 Mayaro Sandstone      alternative name for the Goudron 
                        Sandstones occurring at stratigraphic 
                        intervals above the pre-Mayaro unconformity 
--------------------  --------------------------------------------- 
 oil in place          stock tank oil initially in place, 
  or STOIIP             those quantities of oil that are 
                        estimated to be in known reservoirs 
                        prior to production commencing 
--------------------  --------------------------------------------- 
 P50 (best estimate)   the most likely estimate of a parameter 
                        based on all available data, also 
                        often termed the P50 (or the value 
                        of a probability distribution of 
                        outcomes at the 50% confidence level) 
--------------------  --------------------------------------------- 
 pay or net pay        a reservoir or portion of a reservoir 
                        formation that contains economically 
                        producible hydrocarbons. The overall 
                        interval in which pay sections occur 
                        is the gross pay; the portion of 
                        the gross pay that meets specific 
                        criteria such as minimum porosity, 
                        permeability and hydrocarbon saturation 
                        are termed net pay 
--------------------  --------------------------------------------- 
 perforate /           the process of creating holes in 
  perforations          the casing, typically using explosive 
                        charges, to allow the reservoir to 
                        be in communication with the production 
                        wellbore 
--------------------  --------------------------------------------- 
 PRMS                  the Society of Petroleum Engineer's 
                        Petroleum Resources Management System 
--------------------  --------------------------------------------- 
 Probable Reserves     those additional reserves which analysis 
                        of geoscience and engineering data 
                        indicate are less likely to be recovered 
                        than Proved Reserves but more certain 
                        to be recovered than Possible Reserves. 
                        It is equally likely that actual 
                        remaining quantities recovered will 
                        be greater than or less than the 
                        sum of the estimated Proved plus 
                        Probable Reserves (2P) 
--------------------  --------------------------------------------- 
 Proven Reserves       those quantities of petroleum, which, 
                        by analysis of geoscience and engineering 
                        data, can be estimated with reasonable 
                        certainty to be commercially recoverable 
                        (1P), from a given date forward, 
                        from known reservoirs and under defined 
                        economic conditions, operating methods, 
                        and government regulations 
--------------------  --------------------------------------------- 
 TD                    total depth 
--------------------  --------------------------------------------- 
 

Notes to Editors

LGO Energy plc is an onshore Trinidad focused production, development and exploration company. The Company has an estimated 11.8 mmbbls of 2P reserves in the Goudron field which produces light sweet crude (average 37 degree API).

In addition to its reserve base, LGO has significant low risk, onshore upside in the Trinidad portfolio with 22 mmbbls of 2C contingent resources in the Goudron field, associated with an enhanced oil recovery waterflood project, and an estimated unrisked oil in place of 1.3 billion barrels in the South West Peninsula leases.

Trinidad has an established oil economy with infrastructure, skills and people. Trinidad has produced over 3 billion barrels of oil to date onshore over the last 100 years and the geology is low risk and highly prospective. Major oil companies operating in country include BP, Shell, BHP Billiton and Perenco. Despite the historical financial constraints, LGO has maintained its license to operate with strong relationships with the State Oil Company, communities, supply chain and Government.

This information is provided by RNS

The company news service from the London Stock Exchange

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March 13, 2017 03:00 ET (07:00 GMT)