Africa focused small-cap player Azonto Petroleum is continuing its work on the offshore Ivory Coast Gazelle field, despite difficulties in the market.
A field development plan, submitted by operator and 87% equity holder Vioco, which is 35% owned by Azonto, has been approved by the Ivory Coast's Government and includes a 25-year Exclusive Exploitation Area agreement.
Gazelle is due to be developed using a wellhead platform, connected to an onshore gas processing plant at Grand Bassam, which could then feed a nearby power station, being developed by CI-Energies. Sanction for the upstream section of the project is scheduled for Q2, with first gas following a 15-month construction period.
The firm has just completed a review of its business, including a new strategy, which included a reduction in headcount, including its managing director and CFO.
"Despite the oil price weakness, the economics of our project remain robust and relatively unchanged," says newly appointed CEO Grégory Stoupnitzky.
However, the broader environment has been challenging, he said: "The last three months have been characterized by a material decline in the price of oil, and an adverse operating environment for companies in oil, gas and related industries. This has led to a severe change to the valuation of the sector; it is particularly punishing for small cap, non-producing, and exploration companies. Many in the industry, regardless of size, are reassessing capital allocation to projects, cutting operating expenses and focusing on essential activities."
Vioco has continued to mature the Hippo North prospect, 7km from Gazelle, in 70n water depth. Hippo North is now ranking first among others to deliver potential additional gas resources. Vioco and partner Vitol are considering further drilling on Hippo, which could extend the production profile on Gazelle.
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