Petroleum Africa
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Tuesday, March 23, 2021
Further to the announcement on February 18, ADM Energy PLC announced that it has conditionally agreed to invest in the development of the Barracuda oil field in OML 141, an existing discovery and near-term production asset in swamp/shallow waters offshore Nigeria. The investment will be made by way of an acquisition of a 51% interest in K.O.N.H. UK Limited, which holds an indirect interest in a Risk Sharing Agreement (RSA) for the Field.
The Barracuda field sits in OML 141, an oil mining license area covering 1,295 km2 in the swamp/shallow waters of the Niger Delta in Nigeria. Four existing wells drilled in 1967 (three wells by Tenneco) and 2007 (one well by CNOOC) penetrated oil-bearing high-quality C3 and D-1B sands typical of the stacked delta top and prodelta reservoirs in faulted listric settings common in this area. The plan is for a fifth well to be drilled (Barracuda-5) in order to carry out a flow test in Q4 2021 which, if successful, will be brought onstream.
Subject to the assessment of pre-drilling studies, and agreement from ADM and DBI, it is the intention for the fifth well to be funded through a loan from existing funding partner DBI. Based on existing Barracuda data and field analogues, ADM estimates that it may be possible, which will be subject to production of the new CPR, to recover up to 73 million barrels from the D-1B reservoir alone with several other potential reservoir leads to be further appraised after initial production. In addition, ADM considers that there is a potential opportunity to further increase field productivity through the drilling of five additional wells over the coming years. Any development of the field will be subject to the receipt of the CPR, further and ongoing technical appraisal work, and funding.
Osamede Okhomina, CEO of ADM Energy plc, said: “This is a compelling investment opportunity that provides ADM with the potential to access near-term production upside at minimal risk. The Barracuda Field in OML 141 fits our strategy to target near-term production assets in proven oil and gas jurisdictions and will establish ADM Energy as a multi-asset player in Nigeria. We will bring technical and financial support to the consortium to develop the asset and take it into production in the second half of this year. We have structured the deal to receive an accelerated cash entitlement once the field is in production, with the intention that the cost of the first well will be supported by our financing partner, Dubai Bridge Investments.”
HE Zubair Al Zubair, Chairman of Dubai Bridge Investments, said: “We partnered with ADM at the end of last year because their strategy aligned with our own of seeking out investment opportunities in the energy sector in Africa. The Barracuda Field, an attractive near-term production asset with significant potential upside, is the type of excellent opportunity we envisioned when we first decided to collaborate with ADM. Our planned financial backing combined with ADM’s extensive contacts and breadth of experience of the region and the oil and gas industry forms a formidable partnership and we look forward to building a long-term relationship.”
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