Sirius Petroleum PLC Ororo Field Update - Compact Well Heads Ororo 4+5

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Sirius Petroleum PLC

20 March 2018

20 March 2018 RNS Reach

Sirius Petroleum Plc

("Sirius" or the "Company")

Ororo Field Update

Delivery of Compact Well Head Systems for Ororo-4 and Ororo-5

Sirius Petroleum (AIM:SRSP), the Nigeria focused oil and gas development and production company, is pleased to provide a further update on the Company's Ororo Field operations, confirming that two further well head systems are on route to Nigeria where they are planned for deployment on wells Ororo-4 and Ororo-5.

Sirius announced on 21 December 2017 the delivery of its first two sets of Cameron SOLIDrill modular compact well head systems in Nigeria for the Company to commence the drilling programme at: Ororo-2 and Ororo-3. Sirius plans to commence the drilling of its first well on the Ororo Field, the Ororo-2 in April 2018 which will be in a location close to the Ororo-1 well which was originally successfully drilled by Chevron in 1986.

All well head equipment and services for the Ororo Field are being supplied through Cameron, a Schlumberger Group Company. The Cameron SOLIDrill modular compact wellhead systems increase casing and tubing hanger landing reliability and help prevent debris from entering the wellhead. The hangers and packoffs are designed with angled shoulders to repel debris, such as dirt, metal shavings, and cement plugs.

Ends

Enquiries:

   Sirius Petroleum                                                        [phone] 

Bobo Kuti, Chief Executive

Mark Henderson, Chief Financial Officer

   Cantor Fitzgerald Europe                                         [phone] 

David Porter/Nick Tulloch

   Gable Communications                                             [phone] 

John Bick [e-mail]

Sirius Petroleum's Strategy and the Ororo Field

The Company's strategy is to target proven opportunities and maximize hydrocarbon production and recovery through the acquisition of discovered assets in Nigeria, with a particular focus on shallow water offshore areas and realise upside potential through appraisal activities. As part of the Company's strategy, Sirius has agreed innovative funding and operating partnerships with global industry leaders to work together on the Ororo asset and execute the drilling campaign to first oil.

Sirius's initial focus is on the Ororo field, which was originally operated by Chevron in 1986. Chevron drilled Ororo-1 and hydrocarbons were discovered in seven sandstone reservoirs (D1 to D5, F and G). Four of the reservoirs in the original Ororo-1 well were tested, two produced oil (D3 and G) at a combined rate of 2,800 bopd and two produced gas condensate (D4 and D5).

The Ororo field is located within OML 95 in the Niger Delta, offshore Nigeria, in the western part of the prolific Niger Delta petroleum system. It lies in shallow waters offshore Ondo State in water depths ranging between 23ft and 27ft. The field is adjacent to the Mina, West Isan, Ewan, Eko and Parabe fields, all of which are operated by Chevron.

Sirius has a 40% economic interest under a Financial & Technical Service Agreement and entered into a Joint Operating Agreement ('JOA') in August 2017 with its indigenous partners Owena Oil & Gas (100% state owned entity) and Guarantee Petroleum, who own 27% and 33% respectively.

According to the Ororo CPR produced by Rockflow Resources ("Rockflow") and set out in the Company's admission document, it is estimated that the Ororo-2 well will initially produce approximately 2,700bopd of light oil and 6mmcfd of gas.

Rockflow estimates that the Ororo asset has a Mid Case Net Present Value to Sirius (NPV10) of $96m, based on a $65 per barrel flat real oil price for the life of the field. According to the Ororo CPR, the mid-case gross recoverable 2C contingent resources are 24 mmboe.

Ororo economic evaluations produced by Rockflow subsequent to issue of the CPR:

 
 Oil Price   Gross      Gross      Gross      Sirius     Sirius     Sirius 
              Project    Project    Project    Project    Project    Project 
              NPV10      NPV10      NPV10      NPV10      NPV10      NPV10 
              US$        US$        US$        US$        US$        US$ 
              MM Low     MM Mid     MM High    MM Low     MM Med     MM High 
----------  ---------  ---------  ---------  ---------  ---------  --------- 
    65          126.5      279.4      695.2       32.9       96.1      274.3 
----------  ---------  ---------  ---------  ---------  ---------  --------- 
    70          144.6      309.1      756.9       40.9      108.9      300.9 
----------  ---------  ---------  ---------  ---------  ---------  --------- 
 

Gas BOE conversion factor: 1 barrel of oil equivalent = 5800 cu ft gas

*Under SPE Guidelines, the hydrocarbons are classified as Contingent Resources and will convert into Reserves upon finalisation of approvals and agreements with contractors. The valuation methodology used by Rockflow provides for the commercial producible resources to be defined rather than the technically producible oil. Under the present oil price scenario this results in a modest change for the tail end volumes in relation to the volumetrics reported on 2(nd) June 2017

 
 Glossary 
 Bopd:            barrels of oil per day. 
 Mmboe:           million barrels of oil equivalent. 
 Contingent       Resources estimated at a certain 
  resource:        date as potentially recoverable 
                   from known accumulations, but which 
                   are not currently considered commercially 
                   recoverable. 
 2C:              Proved and Probable Contingent Resources. 
 Packoff:         A flexible housing used to seal 
                   an irregular surface such as a wireline. 
 Tubing Hanger:   A device attached to the topmost 
                   tubing joint in the wellhead to 
                   support the tubing string. The tubing 
                   hanger typically is located in the 
                   tubing head, with both components 
                   incorporating a sealing system to 
                   ensure that the tubing conduit and 
                   annulus are hydraulically isolated. 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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March 20, 2018 03:30 ET (07:30 GMT)