LGO Energy plc is set to resume drilling on the Goudron field in South Eastern Trinidad early in 2017. This follows refinancing of the company's loan facility.
Neil Ritson, CEO and director for LGO, said the company had secured funding to the tune of US$8.6 million.
Ritson said: "After a difficult period with low oil prices and a senior debt facility that was difficult to service effectively from field operations, which themselves were constrained by limited available funds, we can now look forward to the imminent return to development drilling and the deployment of capital to increase production at the company's flagship Goudron field."
He said during the recovery period some very difficult decisions had to be made on deployment of funds and shareholder equity.
"We appreciate the commitment and support of our shareholders during this process," he said.
The Goudron field lies between the East Moruga and Beach Marcelle fields and has direct access to the Petrotrin oil export pipeline to the Pointe-a-Pierre refinery
LGO's local operating subsidiary, Goudron E&P Limited (GEPL), has submitted a formal request to Petrotrin and the Ministry of Energy to drill the first of its planned Mayaro sandstone infill wells. Designated H18 G-11, the well will be drilled vertically to a total depth of 1,250 feet.
The company said the cost of the first well is estimated to be less than US$500,000 and it is expected to take approximately 12 days to drill and complete.
Currently, GEPL has outline approval for 45 new wells in the Goudron Field. Well H18 G-11 will be the first in a campaign of infill wells designed to increase production from the present shallow oil pay in the Mayaro sandstones.
During the 2014 and 2015 C-sand drilling campaign, 15 wells were drilled through the Mayaro sandstone reservoir interval and electric logs showed an average net oil pay of approximately 200 feet per well.
GEPL said the drilling contractor selected will provide efficient and flexible drilling capability and has offered a turnkey drilling package in line with the company's cost and risk management processes.
Preparation of the small drilling site required for the footprint of the lightweight rig is anticipated to commence soon after the rig contract is signed.
Fergus Jenkins, LGO's chief operating officer, said: "GEPL is looking to take advantage of the current lower rig rates and rig availability to recommence the drilling programme at Goudron at the earliest opportunity. We anticipate having the approvals in place before January and will then start the drilling as soon as practical.
"With the current oil price and expected cost of drilling the economic payback on the incremental production from Mayaro sandstone wells is expected to be less than 12 months."
LGO, formerly Leni Gas and Oil plc, is a UK company engaged in production and exploration of oil and gas. The company's T&T operation consists of four main assets: the Goudron field, the Icacos shallow oilfield, the Moruga North leases and the Cedros Peninsula. Based in London, LGO also has operations in Spain, the US, Cyprus and the UK.
