Fourth Gabon well exceeds expectations while FSO and field reconfiguration ops near completion

Houston-based Vaalco Energy is expecting a boost to its reserves and production after the fourth well in its 2021/2022 drilling programme offshore Gabon goes online next month. The U.S. player is also in the process of wrapping up the replacement of the existing floating production, storage and offloading (FPSO) unit with a floating storage and offloading (FSO) vessel and the field reconfiguration project is expected to be completed next month.

Vaalco hired a jack-up rig provided by Borr Drilling in June 2021 for its 2021/2022 drilling campaign focused on the Etame field. Thanks to this deal, the Norve rig was expected to spud two development wells and two appraisal wellbores while an option for drilling additional wells was also on the cards.

Back in December 2021, Vaalco kicked off its 2021/2022 drilling campaign with the drilling of the Etame 8H-ST development well, which came online in February 2022. Afterwards, the rig moved to the Avouma platform to drill the Avouma 3H-ST development well, which was completed and brought online in April 2022. Vaalco’s third well in this drilling campaign was the South Tchibala 1HB-ST, which discovered two potential Dentale producing zones.

Come July 2022, the firm opted to exercise its options to extend the contract for the Norve rig to add two additional wells to the programme – the Ebouri 4H development well and a Northeast Avouma well. These wells are expected to be tied into the Avouma platform if the drilling uncovers more hydrocarbons.

Vaalco started drilling the fourth development well in its drilling campaign in August 2022 after the Norve rig mobilised to the Southeast Etame North Tchibala (SEENT) platform to drill the ETBSM 2H-ST well, following the completion of the South Tchibala 1HB-ST well. The fourth well in the firm’s 2021/2022 drilling campaign was targeting the Dentale formation, which is “productive in other areas in the Etame license.”

In an update on Tuesday, Vaalco informed about “the successful drilling” of the North Tchibala 2H-ST well that was drilled from the SEENT platform in the Etame field. The firm says it drilled and cemented 9-5/8-inch casing string with “multiple potentially productive sands” in the Dentale 18/19 pay zones behind casing. Furthermore, the U.S. player encountered nearly 100 meters of gross Dentale pay sands (72 meters net), exceeding its previous expectations.

Vaalco points out that the Dentale 18/19 sands, initially targeted for production in this well, are analogous to Dentale sands previously productive in the North Tchibala field, with similar porosity and permeability. The company highlighted that additional Dentale sands were encountered in the wellbore that could be targeted for testing and production in the future. The U.S. firm is preparing to complete the North Tchibala 2H-ST well utilising a fracture stimulation vessel that will provide support with multiple stimulation and frac-pack operations.

George Maxwell, Vaalco’s Chief Executive Officer, commented: “With the successful drilling of the North Tchibala 2H-ST well that encountered multiple Dentale sands in the wellbore, we are proceeding with completion and fracing in the Dentale 18/19 interval. We expect to have a stabilised flow rate by the end of October, and we are very encouraged with the nearly 100 meters of gross pay sands we encountered during drilling, which exceeded our internal expectations.

“Once on production, we expect to add new reserves from the 2H-ST well, some of which were not previously in our 2P reserve base. The positive results from this well gives us increasing confidence in targeting the Dentale sand for production at Etame in addition to the Gamba – thereby further increasing the production runway from this high-quality field.”

Meanwhile, as part of the Etame Marin field reconfiguration, Vaalco is working on replacing the existing BW Offshore-owned FPSO Petroleo Nautipa with an FSO unit. To this end, Vaalco signed a binding letter of intent (LOI) in August 2021 with World Carrier Offshore Services and based on the terms of the agreement, approved by the Etame joint owners, World Carrier would provide and operate the 2001-built Cap Diamant double-hull crude tanker, as an FSO renamed as the Teli, which is scheduled for deployment on the field in the third quarter of 2022.

Earlier this month, Vaalco agreed on a short-term extension with BW Offshore for the FPSO Petróleo Nautipa, which has been operating on the Etame Marin field for Vaalco since 2002. As a result, the production has been extended from 20 September to 4 October 2022 ahead of demobilisation.

Within its update on the FSO Teli installation and field reconfiguration at Etame, Vaalco outlined that it had permanently moored the FSO Teli in position while final connections of the production risers that would deliver oil to the Teli from the Etame platform were in progress. The company also disconnected and rerouted all except two production lines to the FPSO Petroleo Nautipa in preparation for the decommissioning, demobilisation and retirement of service of this FPSO, as planned.

Moreover, the U.S.- based firm has installed over 90 per cent of the approximately 5,100 meters of the new subsea, flexible pipe for the reconfiguration of the Etame field. In addition, the firm has installed all new structural deck extensions at the Etame platform and all equipment packages required for the first oil, allowing the Etame platform to serve as the central processing hub for the Etame field once reconfiguration is complete. Vaalco expects completion of all FSO and first oil field reconfiguration activities in the first week of October 2022.

“Additionally, the FSO hookup and Etame full field reconfiguration are proceeding as planned and we currently expect to have the project completed in October. The new FSO provides us with additional flexibility and has an effective capacity for storage that is 50 per cent larger than our current FPSO. It also reduces our expected storage and offloading costs by 50 per cent which should lead to an extension of the economic field life, resulting in a corresponding increase in recovery and reserves at Etame,” added Maxwell.

Located offshore Gabon, the Etame Marin field is operated by Vaalco with 58.8 per cent working interest and 63.6 per cent participating interest. Other partners are Addax Petroleum and PetroEnergy.

When it comes to Vaalco’s activities elsewhere, it is worth noting that the U.S. firm received approval earlier this month for its plan of development (POD) for a discovery located in Block P in Equatorial Guinea. Vaalco plans to bring this project on stream in 2026.

In the meantime, after Vaalco entered into a definitive arrangement agreement with TransGlobe in July 2022, ISS endorsed this merger.