COPL: Nigeria drilling start imminent as jack-up rig LoI signed

Oil company Canadian Overseas Petroleum Limited has signed a letter of intent with an unnamed offshore drilling company for the use of a jack-up rig offshore Nigeria.

COPL plans to use the rig for an appraisal drilling program over the NOA 1 discovery made by a previous operator in 2001. The discovery sits in the OPL 226 offshore block located approximately 50 km offshore the central delta region of Nigeria.

The company on Wednesday said its Nigerian Affiliate in March signed a non-binding letter of intent with an offshore drilling contractor for a new build high spec jack-up drilling rig.

“The rig is currently undergoing testing and final inspections before its acceptance by the contractor. Successful completion of these tests is one of the Affiliates’ conditions in moving forward in the contracting process,” COPL.

COPL also said that During the fourth quarter, the NNPC granted conditional approval of a 24-month extension for the Phase-1 PSC – until October 2020 – subject to certain conditions including the submission of a Performance Bond of US$7 million.

In an update on Wednesday, COPL said its Nigerian Affiliate has accepted a term sheet from a “recognized Nigerian Bank” for the provision of a $7 million Performance Bond which will meet the principal condition of the term extension of Phase 1 of the OPL 226 PSC

“The Company expects the Performance Bond to be in place to the satisfaction of the regulatory authorities in the coming weeks, at which point activities on OPL 226 can be commenced in earnest,” COPL said.

COPL expects to drill at least three appraisal wells in the NOA 1 area, and has said it expects to bring four appraisal wells onto production at a forecast initial production rate of 6-10,000 bpd per well, by the end of 2020.

Arthur Millholland, President & CEO, said: “We are now well placed in the development of our strategically important Nigerian asset as we look to commence drilling of the appraisal wells later this year. This is a key step to enable COPL to become a successful mid-tier oil and gas company.

“Over the last year we have been focused on securing the required contracts and regulatory approvals for OPL 226, raising the necessary funds for the expanded and accelerated program of the asset, while at the same time sourcing contractors and suppliers to perform the drilling, logistics, and supplies needed to enable production. We look to the future with confidence given the imminent commencement of operations and the recent evaluation of our Nigerian asset’s resources.”

Historically, only five wells have been drilled on OPL 226 by previous operators including Noa-1 drilled by Solgas in 2001, Oyoma-1 and Dubagbene-1 in 1972, Nduri-1 in 1973, and HJ South-1 in 1987.

The Noa-1 discovery well, drilled in 2001, encountered 7.0 m of gas net pay and 18.7 m of oil net pay. Three additional gas-bearing sands were also encountered by the Noa- 1 well.

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