Decklar Resources Inc. started rig operations for Oza oil field development in the northern part of oil mining license (OML) 11, onshore Nigeria.
Oza-1 well re-entry includes pulling out existing tubing and running cement bond and cased hole reservoir logs. Re-entry activities will include testing three oil bearing zones (L2.2, L2.4, and L2.6) independently. Upon successful testing, a final dual-tubing string completion will be installed and L2.2 and L2.6 zones placed into production. The drilling rig will then skid on the same drill pad as Oza-1 to a new drilling slot and a horizontal development well will be drilled in the L2.4 zone and placed on production.
Crude oil from the wells will be immediately available for export through existing facilities which include an export pipeline tied into the Trans Niger Pipeline (TNP) which in turn flows into the Bonny Export Terminal on OML 11.
Oza development is expected to continue with one or two more re-entries on existing wells and additional development drilling program with a potential of 8-10 being drilled for full field development. Additional early production and central processing facilities will be added as required to accommodate additional production levels.
Major components of the drilling rig equipment are being transported to the field the week of May 28. The rig should be moved, installed, and rigged-up by mid-June.
In April 2019, Decklar Resources subsidiary Decklar Petroleum Ltd. entered a risk service agreement (RSA) with Millenium Oil and Gas Co. Ltd. to provide technical, financial, and operational support to develop Oza field.
The RSA provides Decklar with the majority share of production and associated cash flow from the field in exchange for funding and technical assistance to restart commercial production and full field development. Decklar is responsible for funding all capital expenditures and is entitled to 80% of distributable funds until all capital investment has been recovered. After cost recovery is achieved, Decklar’s share is based on a sliding scale starting at 80% and declining to 40% once cumulative production exceeds 10 million bbl.