Providence Resources is also reviewing a number of new drilling opportunities in the region, which could see Providence Resources taking advantage later in the year Re-instating production Impacted by Hurricanes
As previously announced, September 2008 Hurricanes Gustav and Ike seriously impacted production in the area, including Providence Resources’ production from its Ship Shoal 253 and High Island A-268 producing fields in addition to delaying the start-up of the new Galveston A-155 gas field by around six months. The cumulative impact on from this lost/deferred production is estimated at around 500 boepd net to Providence.
Installation of the production platform at Galveston A-155 was performed in January 2009 and the wellbore completion was carried out during April 2009 using the Hercules 350 jack-up drilling rig. A production flow-line will now be laid in May to connect the platform to the gas export infrastructure, with first gas production now expected in early third quarter at rates of up to c. 200 boepd net to Providence.
At Ship Shoal 253, all major remedial works on the topsides production facilities and platforms have now been effectively completed with some remaining sub-sea pipeline work still to be finalised. Repairs to third party export pipelines have taken longer than planned and it is therefore expected that production will re-commence in mid third quarter at a rate of 250 BOEPD net to Providence Resources.
At High Island A-268, production re-commenced in first quarter following the re-instatement of the main third party gas export line that was damaged. Plans are now being finalised to hook-up the HI A-268 wells (currently producing c. 30 boepd) to a compressor during second quarter to further maximize the field’s production rate and reserves potential.
In addition to the current producing zones, there are also gas bearing zones behind pipe in each of the wells which will be accessed in the future once the current producing zones have been fully depleted.
Enhancing Production Rates & Evaluating Drilling Opportunities
At Vermillion 60, a significant re completion program has been agreed for second quarter to produce from a new zone that should see Providence’s net production increase from 25 boepd to some 300 boepd. This work is expected to take place within the next six weeks.
At Main Pass 19, a work-over was performed on a well in the field during first quarter to allow the well to produce at higher oil rates. The result was that gross oil production from this well increased from a production rate of c. 5 bopd to an initial stabilized rate of c. 140 bopd.
In addition to work programmes at its existing producing assets, the company has a number of drilling opportunities which are currently being examined for potential activity later this year depending on partner agreement and rig availability and rates.
Speaking today, Tony O’Reilly, chief executive officer of Providence Resources, said:
Over the past two years, we have built up a sizeable portfolio of oil and gas assets in the Gulf of Mexico. Unfortunately, last year’s hurricanes severely impacted our production rates and development plans, but I am pleased that we have been able to react in a timely manner to re-instate production, as well as to bring on line new opportunities. The cumulative impact of the above measures should result in our daily production rates from our Gulf of Mexico portfolio increasing by some 900 BOEPD by mid Q3.
Looking further ahead, Providence will continue to optimize its asset portfolio as well as looking at new opportunities in the region. On the drilling front, the Company is reviewing its extensive list of opportunities in light of the significant reduction in rig rates over the recent months.
