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LGO Energy: operational update and 3Q production

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Oilfield Technology,

LGO has announced the Group third quarter production and provides an update on its operations in both Trinidad and Spain.

The Group's third quarter 2016 production was an average of 526 bpd. A total of 48 358 bbls were produced during the quarter; 38 354 bbls at Goudron, 1232 bbls at Icacos and the balance of 8772 barrels in Spain, all net to LGO's interest.

Production in Trinidad was materially affected by a number of electrical power outages in the field caused by seasonal storm activity including Tropical Storm Matthew. Underlying production, corrected for these seasonal variations, was flat quarter to quarter. The work-over activities carried out by the company as previously announced fully counteracted declines in the base production at Goudron and, during October, production has risen as those wells have cleaned up and continued to perform strongly.

In Spain production was lower than in second quarter, at an average of 95 bpd compared to 123 bpd, due to both planned and unplanned rig maintenance on the company-owned work-over rig. During periods of rig downtime a number of wells, including the key Ayo-37 well, were offline and impacted on production in the quarter, however these have now been returned to production and all wells are currently online. Monthly sales of crude oil as fuel oil to the Verallia-owned glass factory in Burgos have continued and are agreed through until at least end year. Terms for the sale of the oil stocks totalling approximately 10 000 bbls of treated sales oil, have been agreed subject various administrative and tax clearances required by the buyer, and completion of the sale awaits those steps. The company will report further on that sale in due course.

A biennial rig recertification has recently been completed on the company's Spanish work-over rig at Ayoluengo and it is expected to be returned to service shortly. Two work-over rigs from Altech Limited continue to be available at the Goudron field and are deployed on an as needed basis to carry out both well maintenance and recompletion work.

Neil Ritson, LGO's Chief Executive, commented:

"Seasonal variations in production in Goudron are a feature of the field although this year the wet season in Trinidad has been more disruptive than we have previously experienced. All wells and equipment are now back online across the Group and we look forward to a more stable production period to end year."

"LGO also continues to advance it's re-financing of the BNP Paribas debt, now standing at approximately US$2.6 million, and the company will update the market on that process as soon as possible."

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