Eco Atlantic Oil and Gas (LON: ECO | TSX‐V: EOG) on Thursday said its partners in the Orinduik petroleum block in offshore Guyana are closer than ever to selecting further drill targets, with seismic reprocessing set to complete this summer.
Eco Atlantic’s co-founder and chief operating officer, Colin Kinley, said exploration demand will likely increase “to bridge the deficit between renewable capacity and growing energy demand”. He added that the Guyana / Suriname Basin is on course to hit “over a million barrels of production per day” mid-way through the current decade.
Kinley noted the “estimated breakeven prices of US$35, US$25 and US$32 per barrel” reported for the Stabroek block. He said the estimate “proves extremely positive for the Orinduik partners and company stakeholders”. Kinley concluded that “this has motivated the drive to additional drilling”.
A strong project
The company’s Eco Guyana subsidiary holds a 15% working interest in the block. This is alongside Total E&P (EPA:FP) /Qatar Petroleum joint venture (“JV”) TOQAP Guyana’s 25%. Operator Tullow Oil (LON:TLW) has a 60% interest in the block, located in the shallow water of the Suriname-Guyana basin.
The first Orinduik well, Jethro-1, spud in July 2019, followed by Joe-1 later that same year. Despite the continuing Covid-19 pandemic, the JV chose not to seek a time extension for Orinduik. It is still seeking to “accelerate progress towards” drilling a third Orinduik well.
The company and its partners are making excellent progress at Orinduik. In fact, they plan to select the next drilling target in the third quarter. Seismic reprocessing is on track to finish by the end of the summer, followed by target selection.
Subject to JV approval, Eco Atlantic is ready drill a well in 2022.
The Orinduik block is updip and adjacent to the Stabroek Block, operated by ExxonMobil. There have been 20 discoveries at Stabroek, with estimated recoverable resources of more than 10 billion barrels of oil equivalent. Impressively, there were just three years from the final investment decision to first oil production at Stabroek’s Liza oil field.
In the past 18 months, Tullow has significantly advanced Orinduik exploration, supported by Eco Atlantic and TOQAP’s technical teams. This included in-depth analysis of Joe-1 and Jethro-1.
Tullow already released a schematic of the prospects it is focusing on, located on-trend with the Liza and Carapa discoveries. The Carapa-1 well, located on the Kanuku block, discovered light oil in January. Kanuku is directly in board of Orinduik and Tullow is part of the partnership that drilled there.
Ongoing interpretation, and the multiple analogues from other discoveries in the area, have helped with a refined interpretation and AVO analysis on the new Pre-Strack Depth Migration (“PSDM”).
AVO analysis is a technique for determining information about the rock – such as density, thickness, and fluid content. PSDM, meanwhile, is tool that helps build a picture of structures under the surface.
In addition, the JV continues detailed mapping of the Suriname-Guyana basin’s depositional channel systems. Eco Atlantic explained how this work “is supported and mapped with data from each new well”, in addition to previous logs.
Thanks to high-resolution reprocessing, the JV discovered that the basin’s slope channel systems, along with terraces and resultant ponding, have created traps and reservoirs.
“We are seeing very material independent and stacked prospects and will define a ranking of these targets in the coming fall, which we are prepared and budgeted for, and (assuming JV approval) which will enable us to drill on the play in 2022,” Kinley said.