French oil major Total has made two oil discoveries offshore Angola through its subsidiary, TEPA (Block 15/06) Ltd. and its partners.
Nzanza-1 and Cinguvu-1 wells, located in Block 15/06 roughly 350 kilometers (approximately 217 miles) North-West of Luanda, were drilled in a water depth of 1,400 meters (roughly 4,593 feet). They reached a total depth of respectively 3,008 meters (9868 feet) and 3,023 meters (9918 feet). Both wells encountered oil pay in sands of Lower Miocene age.
During production tests, Nzanza-1 well produced an 18° API oil at rates above 1,600 barrels per day (b/d). An analysis of the results indicates a potential for future production wells in excess of 5,000 b/d per well, when associated to artificial lift. At the Cinguvu-1 well, the production test, limited by surface facilities, reached a flow of 6,400 b/d of a 23° API oil.
After the Sangos-1 and N'Goma-1 discoveries in 2008 and Cabaça Norte-1 in 2009, these new discoveries confirm the potential of Block 15/06 in Angola.
TEPA (Block 15/06) Ltd. holds a 15% interest in the Block 15/06, operated by Eni.
Total has held a presence in Angola since 1953 and operated 491,000 barrels of oil equivalent per day in the area in 2009.
To read more about Total's increased focus on the upstream sector, see OGFJ editor Don Stowers' interview with Total CFO Patrick de la Chevardière in the April 2010 issue archived online OGFJ.com.
Photo courtesy of Total
Brigham Exploration takes stepsto ramp up Bakken drilling, sellsWest Texas assets to Legacy
In an effort to ramp up its Bakken drilling program, Brigham Exploration Co. has acquired additional acreage in the northeastern part of its Rough Rider project area, issued 14 million shares at $18.00 per share, and agreed to sell a portion of its West Texas assets to Legacy Reserves LP for $14 million.
Rough Rider acquisition
In the Rough Rider project area, Brigham signed a purchase and sale agreement to acquire just over 10,000 net acres, bringing Brigham's acreage position in Rough Rider to approximately 115,000 net acres and increases its core acreage position in the Williston Basin to approximately 157,000 net acres.
Brigham also announced the completion of two operated Bakken wells in its Rough Rider project area. The Papineau Trust 17-20 #1H and Kalil 25-36 #1H produced 3,042 (2,616 bo/d and 2.55 MMcf/d) and 1,586 (1,334 bp/d and 1.51 MMcf/d) barrels of oil equivalent, respectively, during early 24 hour peak flow back periods. Brigham maintains an approximate 43% working interest in the Papineau, which was completed with 29 frac stages, and an approximate 38% working interest in the Kalil, which was completed with 30 frac stages. Also participating in the Papineau and the Kalil was US Energy Corp. Brigham will back in for 35% of US Energy's working interest in the Papineau and Kalil upon achieving group payout of wells seven through ten under the drilling participation agreement.
Bud Brigham, chairman, president and CEO, stated, "Our pending acquisition of over 10,000 net acres within our Rough Rider project area is a significant net asset value creation event for our stockholders, particularly when you consider we have added over 23 net Bakken locations to our core development portfolio, and potentially over 23 additional net locations in the Three Forks. Given our land efforts, we expect our acreage position in Rough Rider to grow further. Excluding the Three Forks in Rough Rider, taking into account the pending acquisition we estimate that we will have 457 net de-risked development drilling locations remaining in our core acreage positions in Mountrail, Williams and McKenzie Counties, North Dakota."
Brigham continued, "Our improvement in well performance in the Williston Basin continues with the successful application of 29 frac stages in McKenzie County, North Dakota. The early 24 hour rate of our 29 frac stage Papineau well was approximately 61% higher than the 24 hour rate of our Figaro well, which was completed with 19 intervals. In addition, our 30 frac stage Jerome Anderson well generated a new initial production rate record of 3,115 barrels of oil equivalent per day for us in the Ross project area. In total, we have now completed 16 long lateral high frac stage wells in the Williston Basin at an average early 24 hour peak rate of 2,417 barrels of oil equivalent per day."
Common stock offering
Secondly, the company has priced its offering of 14,000,000 shares of common stock at a $18 per share. Proceeds will be used primarily to fund its Williston Basin acreage development. Credit Suisse Securities (USA) LLC and Jefferies & Co. Inc. are acting as joint book-running managing underwriters and Johnson Rice & Co., Raymond James, RBC Capital Markets, Tudor, Pickering, Holt & Co., Howard Weil Inc. and Thomas Weisel Partners LLC are acting as co-managing underwriters for the offering.
West Texas asset divestiture
Earlier in March, Brigham agreed to sell the majority of its West Texas assets to Legacy Reserves for $14 million ($10,955 per flowing mcfe). The assets consist primarily of proved developed producing properties, representing nearly 602,000 barrels of oil equivalent as of December 31, 2009. The subject properties produce approximately 233 boe per day, of which 90% is oil.
Over 75% of the properties by value are operated, and the production is in close proximity to existing Legacy assets. The wells are located primarily in Dawson, Howard, Midland and Stonewall counties in the Permian Basin.
Analysis
Jefferies & Co. Inc. recently noted that Brigham's liquidity "appears ample," citing $110 million of cash and equivalents in addition to the capital provided by the recent offering. The firm expects Brigham will be able to finance drilling operations from cash on hand through mid-2012 and suggests public market debt thereafter considering $159 million of high-yield debt comes due for the company in 2014.
Jefferies suggested that, should Brigham choose to sell additional assets, there are options. Net of the sale, BEXP has roughly 18 MMcfe/d of non-core production; 13 MMcfe/d from the Gulf Coast and roughly 5 MMcfe/d from the Anadarko Basin. Divesting these assets could net somewhere in the neighborhood of $125-$180 million, using the Mariner/Edge transaction as a low-end Gulf Coast comparable ($7,414 per flowing).
Brigham's Gulf Coast volumes a have significant liquids component, and the company has undeveloped acreage potentially suitable for a joint venture or a sale "Of note," says Jefferies, "a Mowry Shale position in Wyoming (including Converse & Niobrara Counties)."
– Mikaila Adams
Apache's latest Faghur Basin discovery in Egypt tests 4,554 b/o, 10.1 MMcf/d
Houston-based Apache Corp. has made a discovery (the West Kalabsha I-1X) in the Faghur Basin of Egypt's Western desert. The well, located nearly 10 miles southwest of Apache's Phiops Field, test-flowed at a rate of 4,554 barrels of oil and 10.1 million cubic feet (MMcf) of natural gas per day from 105 feet of net pay in the Jurassic Safa formation.
The West Kalabsha I-1X is the most recent in a series of oil discoveries in the Faghur Basin. Currently under way is an expansion of processing and transportation infrastructure projects that will enable production capacity in the Faghur to rise from 8,100 barrels per day to 40,000 barrels per day in late 2010.
"Apache previously established production in the Safa formation at West Kalabsha-C and Phiops in the Faghur Basin," said Tom Voytovich, vice president of Apache's Egypt Region. The well, on a structure identified by 3-D seismic, encountered pay in over 200 feet of total sand, demonstrating the potential size of Safa accumulations in the Faghur.
"We have two new 3-D seismic surveys completed in the basin, and we are about to begin acquisition on our largest survey of the year to the west, along the trend established by recent discoveries, in an area where no previous 3-D data exists but regional 2-D data indicates promising geological features," he continued.
Apache owns a 100% contractor interest in the West Kalabsha concession and has plans to drill four more exploratory wells targeting the Alam el Bueib (AEB) and Safa formations in the Faghur basin during 2010. Apache plans to drill an appraisal test two miles southwest of the latest discovery before full development plans are formulated.
Increased oil output from the Faghur Basin is forecast to be one of the key drivers of Apache's 2010 production growth - along with the Van Gogh and Pyrenees oil field developments in Western Australia.
Apache has projected 5% to 10% production growth in 2010. Liquid hydrocarbons accounted for 50% of Apache's 2009 global production and 72% of revenues.
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