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LGO gets EMA green light to drill
Leni Gas and Oil (LGO) been given the green light for its drilling campaign which is scheduled to begin next month at the Goudron Field in Guayaguayare, south Trinidad. The Environmental Management Agency (EMA) has approved the company’s application for a Certificate of Environmental Compliance (CEC) for the planned drilling campaign of 30 new wells. In a release yesterday, the company said it would update the market more fully on its drilling plans within the next few days when the text of the CEC had been received in full.
Last month the company wrapped up US$4 million of funding for the drilling campaign. Out of the funding, US$1.5 million to US$2.5 million will be drawn from LGO’s existing US$10 million commercial loan arrangement, US$1 million from a placing at 0.76p on the London Stock Exchange (LSE) and US$1.6 million from a placing and equity swap arrangement with Yorkville.
Shares in LGO were up more than 11 per cent on the LSE yesterday following news of the EMA approval for drilling at its 100 per cent owned Goudron Field where current proven plus probable (2P) oil reserves total 7.2 million barrels. “Given that we delayed the start, we’re now considering continuous drilling. Originally we had planned to do two wells, and then take a break, but now we’re thinking that we might go straight into the 30 well programme,” LGO Chief Executive Neil Ritson had said in an interview last month.
Production from the field has continued at previously announced levels, and the new wells will be placed on production within approximately 60 days of spudding. The company is expecting an additional ten new pump jacks this month and the current recompletion programme, which has seen Goudron’s oil production increase tenfold over the past year, will continue in parallel to the drilling of the new wells.
Over the past year LGO has been reactivating almost two-thirds of the available 90 wells on its acreage and is generating in excess of US$300,000 a month through sustained production of around 500 barrels of oil per day (bopd). The company has so far reactivated 60 of the 154 wells and Goudron is now one of T&T’s leading production oilfields.
Production will increase further when another ten wells are activated early this year. The company will also undertake a new round of exploration drilling at Goudron—the first such campaign since 1981—as well as a farm-in and joint venture opportunity with Beach Oilfield.