Both LGO and its lending bank, BNP Paribas, have reached a further agreement on the terms of the loan outstanding to LGO's wholly owned Trinidadian subsidiary, Goudron E&P Limited (GEPL), which operates the Incremental Production Service Contract for the Goudron Field in Eastern Trinidad. The revised agreement stipulates that GEPL will be able to utilise the equivalent of US$537 000 in Trinidadian Dollars (TT$) in GEPL's business, on expenditure including capital projects in the Goudron Field, where five further recompletion opportunities have been prepared.
LGO has agreed to pay US$896 000 to BNPP as an accelerated repayment on the loan which includes the scheduled July and August 2016 payments and a further pre-payment of US$217 000. The TT$ funds which will be available for use in the Goudron Field result from the ongoing cash flows of GEPL, including VAT returns associated with prior periods, and can be deployed without increasing indebtedness. Following these payments the net loan outstanding to BNPP will stand at US$3.4 million which remains at call.
The company had identified seven recompletion targets in the Goudron Field earlier in 2016 and has so far been able to complete two of these; GY-671 and GY-50, with positive results. The additional funding made available under this new arrangement will allow that programme of recompletions to be continued over the next few months at a rate of approximately two wells per month. Approvals for recompletion work are being sought on a well by well basis and further announcements will be made as the programme proceeds. The next of the planned interventions is in well GY-673 and is expected to involve the recompletion of 105 ft of Mayaro Sandstone reservoir not previously opened for production.
Production at the Goudron Field for the month of May is estimated to be 430 bpd, 8% higher than in April, as a result of recompletion work carried out to date and increased downhole maintenance on which the company embarked in April 2016.
Neil Ritson, the Company's Chief Executive, commented:
"LGO continues to work closely with BNPP to ensure the optimum deployment of capital to production operations. As previously announced we anticipate commencing a programme of drilling new Mayaro Sandstone wells as funding becomes available. We have identified up to 70 low risk infill targets in the shallow Mayaro sands that will greatly increase production whilst we complete the planning for the long term water flood EOR project on the deeper C-sands. In the interim, the recompletion of further legacy wells and the opening for production of intervals in wells drilled in 2014 and 2015 will further enhance returns."
Adapted from a press release by Louise Mulhall
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/14062016/lgo-energy-provides-financing-and-goudron-field-update/