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Leni acquires further interest in shallow US Gulf projects
(7/14/2010 - OGI: Houston) Leni Gas & Oil has extended its acreage in the shallow offshore US Gulf of Mexico with exercise completion of two new developments from Byron Energy.
Leni said today it has acquired a 20% direct working interest, which equates to 16.25% of net revenue, in the Ship Shoal 180 and South Marsh Island 6 Blocks. It previously owned an equity stake in Byron Energy, which it has subsequently converted into direct interests and options over properties in the Gulf of Mexico and Gulf Coast. The option relate to projects which are being operated through joint ventures between Byron and Leed Petroleum.
Following the exercise of this latest option, Leni now has interests in five development and production assets in the Gulf Coast. The newly added Ship Shoal block hosts two prospects with preliminary estimates of best case gross prospective resources in excess of 5 million boe in the oil case, and in excess of 12 bcf (equating to 2 million boe) in the gas case. The new South Marsh Island block has three prospects, and one deep potential location, with preliminary estimates of gross prospective resources in excess of 4mmboe in the three shallow prospects and in excess of 25 bcf/4.2 million boe in the deep prospect.
"The company is extremely pleased with the considerable expansion of our acreage in the US Gulf Coast with now five assets in various stages of production, development, and appraisal," said David Lenigas, company chairman. "The additional assets in Ship Shoal and South Marsh Island are the first in our new joint venture with Byron and have the potential to provide substantial production volumes additive to those current and
planned with Leed."
The newly added Ship Shoal block is located to the east of Leni's existing Ship Shoal interests, which began production in May 2010 at rates in excess of 2,000 boe/d. At Ship Shoal 180, the partners will drill two wells from a single surface location once further geotechnical works finalize resources estimates, target locations, and drilling economics.
At present, seismic interpretation and a review of historical production has identified a significant stratigraphic trapping component, with a previous well identifying high quality sands and reservoir sand thickness up to 60 ft. The new South Marsh Island block is located west of LGO's existing acreage at South Marsh Island 8/Eugene Island 133, and the JV intends to reprocess current 3D seismic dataset and finalize the prospect inventory and resources, before identifying development options.
In accordance with its newly acquired working interest, the company is required to fund 20% of the cost of each development on the new properties.
Click here for earlier report.
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