Eco Atlantic challenges true location of Exxon’s ninth discovery well

Jan 16, 2019 News

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By Kiana Wilburg
Canadian Oil firm, Eco Atlantic, is contending that the location of ExxonMobil’s ninth discovery well, the Hammerhead-1, may very well extend into its promising Orinduik Block.
Speaking on this matter recently during an interview with www.proactiveinvestors.co.uk, was Eco’s Chief Executive Officer, Gil Holzman.
The CEO spoke extensively about the plans for drilling offshore Guyana in 2019. In this regard, he was asked to say why the company is looking to start drilling on the eastern side of the Orinduik Block as opposed to the southwestern side where Exxon’s Hammerhead-well is located.
Holzman said, “Hammerhead is a discovery made by Exxon. They drilled discovery based on our 3D and we see that, (and) let me put it very conservatively, it is highly likely that the Hammerhead discovery itself stretches into our block.
“Meaning that we already in a way, assuming that the geophysics will prove it and we are looking into it. We already have a discovery on our block without drilling and that’s Hammerhead.”
He noted that other prospects within its block but close to the Hammerhead well are not to be construed as extensions to the Exxon discovery.
Holzman added, “…The Hammerhead-1 ‘discovery’ belongs to Exxon but it looks like it stretches into our block. And we have additional blocks next to it…” (See full interview using this link: https://www.proactiveinvestors.co.uk/companies/news/212400/eco-atlantic-oil–gas-tipped-for-140-upside-as-guyana-exploration-wells-come-into-focus-212400.html#/)
Contacted on Eco’s contention yesterday, ExxonMobil’s Head of Government Affairs and Public Relations, Deedra Moe, made it pellucid that Hammerhead-1 belongs to Exxon.
Moe stated, “Hammerhead-1 as we have defined it with the data we have, is fully within the Stabroek Block.”
She also noted that ExxonMobil utilized its own 3-D seismic for its drilling programme.

HAMMERHEAD
On August 30, last, ExxonMobil announced that it had made its ninth discovery offshore Guyana at the Hammerhead-1 well.
Exxon said that Hammerhead-1 encountered approximately 197 feet (60 meters) of high-quality, oil-bearing sandstone reservoir. It said that the well was safely drilled to 13,862 feet (4,225 meters) depth in 3,773 feet (1,150 meters) of water. The Stena Carron drillship began drilling for the well on July 27, 2018.
“The Hammerhead-1 discovery reinforces the potential of the Guyana basin, where ExxonMobil is already maximizing value for all stakeholders through rapid phased developments and accelerated exploration plans,” said Steve Greenlee, President of ExxonMobil Exploration Company.
He added, “Development options for Hammerhead will take into account ongoing evaluation of reservoir data, including a well test.”
Hammerhead-1 is located approximately 13 miles (21 kilometers) southwest of the Liza-1 well and follows previous discoveries on the Stabroek Block at Liza, Liza Deep, Payara, Snoek, Turbot, Ranger, Pacora and Longtail.
Exxon noted that there is potential for additional production from significant undrilled targets and plans for rapid exploration and appraisal drilling.
It said that the Liza Phase One, which is expected to begin producing oil by early 2020, will use the Liza Destiny FPSO vessel to produce up to 120,000 barrels of oil per day.
It said, “Construction of the FPSO and subsea equipment is well advanced. Pending government and regulatory approvals, Phase 2 is targeted for sanctioning by the end of this year. It will use a second FPSO designed to produce up to 220,000 barrels per day and is expected to be producing in 2022.
“A third development, Payara, will target sanctioning in 2019 and use an FPSO designed to produce approximately 180,000 barrels of oil per day as early as 2023.”
The Stabroek Block is 6.6 million acres (26,800 square kilometers). ExxonMobil affiliate, Esso Exploration and Production Guyana Limited, is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.

ORINDUIK JV PARTNERS
In January 2016, Eco signed a Petroleum Agreement and is party to a Petroleum Licence with the Government of Guyana and Tullow Oil for the Orinduik Block offshore Guyana.
Tullow Oil as the Operator of the Block, paid past costs and carried Eco for the first 1000km2 of the 2550km2 3D Survey. Further, Tullow contributed an extensive 2D seismic data set and interpretation.
The Company’s 2550 km2 3D seismic survey was completed in September 2017, well within the initial four-year work commitment the Company made for the initial 1000km2.
In September 2017, Eco announced that its subsidiary, Eco Atlantic (Guyana) Inc. entered into an option agreement on its Orinduik Block with Total, a wholly owned subsidiary of Total S.A. Pursuant to the option.
Total paid an option fee of US$1 million to farm-in to the Orinduik Block. An additional payment of US$12,500,000 was made when Total exercised its option to earn 25 percent of Eco’s working interest in September 2018.
Following the exercise of the option by Total, the Block’s working interests became: Tullow – 60% (Operator), Total – 25% and Eco – 15%.
In October, last, the Government approved of the Total farm-in on the Orinduik Block, which has the potential for almost three billion barrels of oil equivalent.

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