Victoria Oil and Gas Copyright © 2013 Site by Susumu
In 2009 and 2010, Rodeo Development Limited drilled and completed two wells, La-105 and La-106. La-105 twinned the SEREPCA La-103 well, La-106 was a stepout well drilled into an unappraised part of Logbaba about 500 m north-east of the La-104 well location. Both of the new wells were drilled directionally from a drilling pad located over the centre of the field to minimise the environmental and social impacts of drilling in a populated area. La-105 tested at flow rates of up to 55 mmscf/d while La-106 tested at flow rates of up to 22 mmscf/d from the Logbaba formation. Both wells have been completed with 4½” tubing. As the wells are produced and the open producing intervals become depleted, additional, shallower sands will be opened with perforating guns run on wireline.
On the basis of these appraisal/development wells, Rodeo Development Limited submitted a Discovery Report to SNH in May 2010, updated the gas reserves estimate, and prepared and submitted a Field Development and Production Plan to the Ministry of Industry, Mines and Technology in July 2010. The Company formally applied for an Exploitation Licence which was received in April 2011. Please refer to Table 1 for the updated reserves position completed in September 2012.
Table 1: Logbaba Reserves, 100% Basis (Bcf)
|Logbaba Gas Reserves (BcF)||September 2012||September 2013|
|Upper Logbaba Proved Reserves (1P)||49||49|
|Proved + Probable Reserves (2P)||212||212|
|Proved + Probable + Possible Reserves (3P)||350||350|
|Entire Logbaba Block|
ERC Equipoise Limited has independently concluded a 50% increase in 1P Reserves and 1C Contingent Resource gas volumes with 1P of 39.1 billion cubic feet ("bcf"), plus 1C of 32.7 bcf. This independent CPR was announced in October in relation to a senior secured debt financing the Company is progressing.
An early production facility consisting of two 20 MMscf/d production units will perform the pressure let-down of the gas from well conditions to the sales gas pipeline inlet while dew-pointing the gas, stabilising the condensate produced and separating out any water produced. The facility is being leased from the EXPRO Group following a competitive tender. (see chart 1)
Chart 1: Expro Group Production facilities
Victoria Oil and Gas has developed a local market for gas with customers including breweries, metal foundries, food processing plants and packaging facilities. Gas Sales Contracts have been signed throughout 2010-2013 with numerous industrial firms including some multinational firms. Victoria anticipates daily sales volumes reaching 12 mmscf/d by December 2013 with an estimate of total gas demand to in excess of 100 mmscf/d within 5 years.
The initial target markets for Logbaba natural gas are industrial customers in Douala and Bonaberi for:
In the longer term as further reserves are proven, gas may be also supplied to a large gas fired power station with either RDL investing in an Independent Power Producer Joint Venture or selling the gas to a third party.
Existing gas discoveries have been unsuitable for commercial production of LPG. However, given the potential demand, in the event of discovery of a gas more rich in LPG within the licence area, this would create the opportunity to invest in bottling facilities for supply of LPG to the local market.
A low-pressure High Density Polyethylene sales gas pipeline network is being installed in four phases to supply customers in Central Douala, South East Douala and South West Douala. The gas is priced at $16 per MMbtu (approximately $16/mcf or $96 per boe) and has a high heating value of 1060 btu/scf. (see Chart 2)
Chart 2: Phased Pipeline Development Plan (does not include Bonaberri)
The total gas distribution network will be approximately 44 km in length comprising pipe diameters between 400mm, and 63 mm with a design pressure of 7 barg and a normal operating pressure of 5.5 barg. The gas distribution network is being constructed in unpaved ground, black top highway and land adjacent to the Douala rail network. Horizontal boring wells, where required, are planned to avoid disruption to trains, traffic and other utilities such as buried electricity cables, fiber optic cables, water and drains.
The custody transfer point will be immediately downstream of a Pressure Reduction, Metering and further Condensate Removal facility located within the customer’s premises with a pressure range 200 – 500 mbarg.
In July 2012, the Company announced the commencement of continuous gas and condensate production operations at Logbaba. The Company’s first three customers were taking delivery of gas in sufficient volume to allow the production facilities to operate 24 hours a day, delivering gas in full compliance with specification. These customers had a combined average daily demand of approximately 0.7 mmscf/d.
In December 2012, the Company reached a production levels of 2.4 mmscf/d. The planned exit rate for the year-end 2013 is 12 mmscf/d from both thermal and on-site gas fired power sales.