Panoro Energy has announced the second quarter 2016 financial results and provides the following updates:

  • First oil production at Aje, offshore Nigeria commenced in May 2016
  • First lifting and sale of crude scheduled for September 2016
  • Near term production anticipated at a rate of 7,000-9,000 bopd, pending resolution of all mechanical issues
  • Cash balance of USD 6.6 million as at 30 June 2016 and no debt
  • Subsequent Offering of NOK 10 million (USD 1.2 million) completed in April 2016
  • Development planning of Dussafu and Aje (phases 2 and 3) continues

Operational Highlights

The first introduction of hydrocarbons, light oil of approximately 42 degree API, from the Aje field to the Front Puffin FPSO was achieved on May 3, 2016. A period of commissioning followed, and the 72 hour production test was completed with the FPSO placed on hire in mid-July, 2016. As previously reported, production is being temporarily constrained; this is due to mechanical issues with the Aje 5 well and the FPSO compressor systems.

In order to resolve the FPSO compressor issue, the system has been under maintenance since early August, and should be fully repaired and working within the next four weeks. The use of the compressor is a key variable in well production. Based on recent performance, with the resumed full use of the compression system, the forward looking production guidance range is anticipated to be 7,000-9,000 bopd prior to remediation work with Aje-5.

Aje 5 requires subsurface intervention to solve a mechanical issue, and is currently materially restricted in its productivity. The Aje Joint Venture is working to implement the most cost effective intervention solution in order to resolve this issue in the shortest possible time period. Average gross daily production at Aje calculated from first oil in May until mid-August has been 5,500 bopd, which includes the entire testing, commissioning, and approval period which completed in mid-July.

Nigerian regulators have recently officially approved production and the export sale from Aje. The first cargo of Aje crude should be lifted during September and Glencore Energy UK Limited has been selected for its offtake.

The initial production data from the 2 existing wells are being used to update our subsurface geological models which were constructed using the recently acquired 3D seismic data. These models are being used to determine the optimum locations for the Aje-6 and Aje-7 wells which will form phase 2 of the Cenomanian oil field development. It is expected that a decision regarding the phase 2 drilling programme will be made towards the end of 2016.

The Aje gas development project based around the commercialisation of the 2C Turonian contingent resources of 163 mmboe (gross) was progressed in the quarter. The development concept involves production of the Turonian hydrocarbons through two or more additional wells, processing and export of gas via pipeline for sale to buyers in the region. Liquid hydrocarbons produced from the Turonian would be stored aboard the FPSO for sale.

AGR TRACS have been commissioned to do a prospective resource review of the exploration potential on OML 113, and the summary of this report should be available later this year.

Mr. John Hamilton, CEO of Panoro, commented: “Achieving oil production at Aje, offshore Nigeria, in the second quarter was a key milestone for the Company. We expect to sell our first cargo of oil during September, representing the start of positive cash inflows from the Aje project. Realising the full potential at Aje is the key priority for the Company and we remain focussed on moving the Dussafu project forward in Gabon.


Source: Press Release and First Half 2016 Report