Oil and gas investment company ADM Energy which in March agreed to invest in the development of the Barracuda oil field in OML 141 in swamp/shallow waters offshore Nigeria, has entered into a non-binding collaboration agreement with OES Energy Services Limited ("OES"), Nigeria's largest swamp rig services provider, and 4Mation Drilling Services Limited, a solution provider in the energy sector.
The three companies plan to explore opportunities to develop Barracuda Field in OML 141 and associated work-related activity in Nigeria
According to ADM Energy, It is the intention of the parties, together with the risk-sharing consortium in respect of Barracuda Field, that a formal agreement will be entered into in advance of any work starting. The collaboration agreement may be terminated by mutual consent.
Subject to any potential formal agreement, the plan is for OES to provide the swamp drilling rigs required for the Project. 4Mation would provide a variety of project management services including well engineering services, technical personnel, security and logistics.
In addition, OES and 4Mation may consider providing vendor financing to achieve the scope of work to be agreed, subject to terms and conditions to be determined at the point of an award of contract, ADM said.
Osamede Okhomina, CEO of ADM Energy plc, said: "The RSA partners continue to build a high-quality circle of specialist partners to facilitate the development of the Barracuda Field. These agreements are important steps in ensuring we are ready to deliver on our drilling plans later in the year, which will bring the project on stream and significantly ramp up our production volumes."
The Barracuda Field sits in the northwest part of OML 141, an Oil Mining Licence area covering 1,295km2 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.
According to ADM, 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.
The intention is that ADM’s financing partner Dubai Bridge Investments may fund certain development costs (terms and conditions are still to be finalised).
Based on existing Barracuda data and field analogues, ADM estimates recoverable oil resources of 73 million barrels from the D-1B reservoir with several other potential reservoir leads to be further appraised after initial production. ADM considers that there may be an opportunity to further increase field productivity from further drilling in the following years.