Survey shows Exxon well extends into other company’s oil block

Mar 21, 2019 News

By Kiana Wilburg

Maps contained in a recently published Resource Report for Certain Assets in Offshore Guyana, indicate that one of ExxonMobil’s 12 oil discoveries in the Stabroek Block extends into the Orinduik Block which is operated by oil majors Tullow, Total and Eco Atlantic.
The report was prepared for Eco Atlantic by Kevin S. Weller, a Registered Petroleum Engineer at Gustavson Associates. The evaluation was completed on March 15, 2019 and released on Monday.
The Petroleum Engineer noted that the bulk of the Tertiary age Hammerhead accumulation is on the neighbouring Stabroek Block, but an estimated one square kilometre is on the Orinduik Block and thus becomes an excellent analogue for Tertiary age leads and prospects for Eco Atlantic and its partners.
(See link for full report: https://www.sedar.com/GetFile.do?lang=EN&docClass=13&issuerNo=00025813&issuerType=03&projectNo=02886425&docId=4479461)
Industry analyst, SP Angel Corporate Finance, which is based in the UK, has also taken note of the situation.

Eco Atlantic CEO, Gil Holzman

During an interview with www.proactiveinvestors.com, the firm said, “What is interesting to note is that very little is being given away by the Hammerhead discovery already in the block, which given the abundance of high-quality seismic significant improves exploration confidence, even if exploration risks remain.”
The company concluded, “Whatever the outcome, that Hammerhead has been observed as coming on to the licence already means that the Company has more than exploration value, but the question is how much. These are luxury problems to have, and ones which we believe will result in value creation for the Company and its shareholders.”
Also speaking on this matter recently during an interview with www.proactiveinvestors.co.uk as well was Eco’s Chief Executive Officer, Gil Holzman.
The CEO spoke extensively about the plans for drilling offshore Guyana for 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#/)

HAMMERHEAD
On August 30, last, ExxonMobil had 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 metres) of high-quality, oil-bearing sandstone reservoir. It said that the well was safely drilled to 13,862 feet (4,225 metres) depth in 3,773 feet (1,150 metres) 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 kilometres) 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 kilometres). 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.