Eco Atlantic to drill first well three years ahead of committed time

Jan 17, 2019 News

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By Kiana Wilburg
The almost flawless exploratory success of ExxonMobil offshore Guyana has many of its neighbouring block owners bursting with exuberance to execute their drilling plans.
Eco Atlantic, for one, plans to spud its first well this year in the Orinduik Block. According to Eco’s Chief Executive Officer (CEO), Gil Holzman, this puts them three years ahead of the committed time.
Holzman said that the partners of the Orinduik Block, being Eco Atlantic, Total and Tullow (Operator), approved the initial 2019 work plan and budget for the first exploration well on the Orinduik Block on November 30, 2018.
He said that the initial budget is for drilling the ‘Jethro-Lobe’ prospect to be spud by the end of May – early June 2019. He said that this will be the first well out of at least two well campaigns proposed by the Operator in 2019.
Holzman also said that the partners have approved the purchase of the necessary long lead items and are currently considering the proposals offered by drilling and service contractors who have offered a firm drilling window within the partners’ envisaged timeframe and competitive rates.
He said that Eco estimates that the approximate net cost to Eco of the first well is around US$7.6 million. The CEO said that Eco is fully funded for the 2019 campaign having current cash of over US$20 million, as announced on November 29, 2018.
Holzman explained that the Jethro-Lobe prospect, which will be drilled from a conventional drill ship, is an Upper Tertiary stratigraphically trapped canyon turbidite in approximately 1,350 meters of water. He said that the targeted prospect is estimated by the company to hold 250 million barrels of gross prospective resources and the chance of success is estimated to be 44 percent.
During an interview, Holzman expounded further on the aforementioned. He noted that after the first well has been drilled, the Orinduik operators will know exactly where it will continue to drill more wells.
“The reason we chose this Jethro Lobe target is because it has the potential to open a complex of targets which lies underneath and surrounding it…So basically, it can open a big field discovery. But we have more than 10 targets in the licensed area and each has an average of 300m barrels of recoverable resources…We estimate over three billion barrels of potential resource on the block…”
Holzman continued, “But again, the block is extremely prospective because of its structure; big channels, big canyons that flow south west to north east … The block could easily hold 10 to 15 wells in the coming years. But we need to start somewhere and we are starting on the eastern side of the block which is a bit deeper in terms of water depth.”

The CEO of the Canada-based firm added, “And it correlates perfectly to the latest Exxon discovery but we have so much time on the license. We are drilling the first well three years ahead of the committed time. And it is going to be a very exciting drilling campaign.”
Eco’s Chief Operating Officer, Colin Kinley, has also commented on the potential of the block. “There are a number of high-potential additional drilling candidates that are on the top of its interpretation list.”
He said that the partners are currently evaluating the synergies of drilling a second well in this campaign and are assessing rig timing and budget to drill a second candidate.
Kinley said, “We have a great deal of confidence in the selection of the Jethro-Lobe drill candidate; the Partners are unanimous on the selection of the location, reservoir quality, charge and production characteristics and view this candidate as having a high chance of success and potential for a first discovery.”
The COO added, “Our confidence was bolstered even further by the upgraded estimate of the discovered recoverable resource to over five billion barrels of oil equivalent on the Stabroek Block, as announced by ExxonMobil and Hess on December 3, 2018.
Further evaluation of previous discoveries in addition to the tenth discovery on the block, Pluma-1, contributed to the upgrade.”
Kinley said that each successful well drilled on Stabroek lowers Eco’s risk on Orinduik.

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$12.5M 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%.
Last October, 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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