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Trinidad

Operation Overview

Trinidad operations comprise of four main assets; the Goudron Field, the Icacos Oilfield, the Cedros Peninsular leases, and Beach Oilfield Limited leases (BOLT) containing the Bonasse Oilfield.
 
The Gourdon Field (LGO 100%) lies between the East Moruga and Beach Marcelle fields in south-eastern Trinidad and has direct access to the Petrotrin oil export pipeline to the Pointe-a-Pierre refinery in western Trinidad. The field was originally discovered by Trinidad Leaseholders Limited in 1927 and was largely developed in its current form by Texaco between 1956 and 1986, when ownership passed to Petrotrin and its predecessors. A field reactivation contract, Incremental Production Service Contract (IPSC), was signed in late 2009 and the contract acquired by LGO in October 2012.
 
The Icacos Oilfield (LGO 50%, Touchstone 50%) lies on the Cedros Peninsular in southwest Trinidad and is surrounded by a number of LGO’s 100% owned petroleum leases.

 

The Cedros Peninsular and BOLT leases all lie within Trinidad’s south-west peninsular.

 

Goudron Field (100% LGO, operator)

The transfer of the Goudron IPSC was completed in October 2012 and production enhancement activity commenced immediately. LGO published the results of an independent reserves evaluation of the field commissioned from Challenge Energy Limited.
 
Senergy (GB) Limited ("LR Senergy") were commissioned in 2014 to conduct a comprehensive review of the Goudron Field to determine in-place hydrocarbon volumes and to estimate recoverable volumes, using all historic data but also work-over, drilling and production data obtained from operations since the Company acquired the asset.
 
Using these studies as a baseline, the Company has updated the reserves assessment by incorporating drilling data from the 2015 drilling campaign as well as production data from wells drilled in 2014 and 2015. This work was audited in June 2016 by Deloitte's Resource Evaluation & Advisory team in Alberta (Canada) (“Deloitte”) and as a result the best estimate oil in place ("STOIIP") within the field had increased over 20% since the 2015 independent review by Senergy and is currently estimated to be up to 975 million barrels ("mmbbls").
 
Reserve estimates also increased. Proven (1P) gross oil reserves in the producing Goudron Mayaro Sandstone and deeper C-sand and pre-Cruse reservoirs have increased by over 3% to 1.58 mmbbls, and the gross proven and probable reserves (2P) have increased by 4% to 11.79 million barrels of oil ("mmbbls"). Proved, probable and possible reserves (3P) have increased by 9% to 25.60 mmbbls.
 
Beyond the primary depletion case considered in the Deloitte reserves study, it is believed that the field would benefit from Enhanced Oil Recovery (“EOR”). Several analogue fields in Trinidad have implemented a water-flood scheme in the past and, based on experiences seen in those fields, the Company is confident that similar reserves and production uplift potential exists in Goudron.
 
The first resource report commissioned by LGO prior to acquiring the field in 2012 reported incremental estimated gross upside (3C) contingent resources of 63.20 mmbbls, related to a future EOR scheme. The 2015 report performed for the Company by LR Senergy did not consider contingent resources, however, the 2016 Deloitte report includes a gross 3C estimate of 63.40 mmbbls, which is very close to the 2012 estimate and again confirms the significant potential inherent in the planned EOR phase of the development.
 
It is important to note that all wells decline as the natural reservoir pressure around the well is depleted. Historic field decline rates have varied between 10% and 90% in the first year. The shallow Goudron Mayaro Sandstone wells generally decline at lower rates than C-sand wells and the C-sand well performance is markedly influenced by the quantity of gas in solution with the oil. In order to arrest decline it is desirable to inject a fluid (typically water) into the reservoir to replace the oil volumes being removed and hence to maintain pressure; this is the expected EOR mechanism to be deployed at Goudron.
 
It is estimated that a water-flood project has the potential to recover up to 60 mmbbls of incremental oil from the existing field. Beyond that, much of the concession is underexplored and there is thought to be significant potential for additional exploration opportunities. These projects will be considered once primary production from the field has been fully optimised.
 
A water-flood is being planned for Goudron to enhance oil recover and following the estimations reported by the independent review, it is estimated that a water-flood project has the potential to recover up to 63 mmbbls of incremental oil from the existing field. Beyond that, much of the concession is underexplored and there is thought to be significant potential for additional exploration opportunities. These projects will be considered once primary production from the field has been fully optimised.
 
Currently, all the oil from around the field is first sent to Gathering Station #207 (GS-207), where water is separated from the oil and the treated water cleaned and returned to the natural environment. Any solids are collected in the base of the tanks, but the quantities are generally small and are removed periodically during routine maintenance. The tanks all hold produced oil and water and the size of the station ensures there is sufficient latency time to get full separation of oil from the water. Oil is then transported by pipeline to Gathering Station #134, from which sales to Petrotrin are made. If any water reaches the sales tank it is bled off and returned to GS-207 for further treatment. Most wells on the field are connected by flow lines routed to GS-207. A few wells flow to separate well head tanks and these are emptied by road tanker and the oil and water taken to GS-207 for treatment.  
 
The production strategy of each well is determined individually on the basis of its characteristics. The majority of the legacy and some of the new wells are being produced by conventional downhole pumps by means of beam engines or so called nodding donkeys.
 
All wells undergo routine and non-routine interventions as necessary. The costs and expected production impact of all intervention work is carefully considered on a well by well basis, along with the availability of rigs and equipment to carry out the work. As a result it is likely that there will be some wells off-line on any one day.
 
A Lease Automatic Custody Transfer (LACT) Meter has been considered for installation, however, it is not required at the current production levels. As higher rates are achieved a suitable unit will be procured and installed.
 
Preliminary design and planning work for a shallow well drilling program at the Goudron field has been undertaken. Environmental approvals have been secured and applications for approval to drill will be submitted as required. The Company will commence this new Mayaro Sandstone Program as soon as funding is available.
 
The Company previously issued guidance that the Goudron Field could produce at rates of up to 1,500 bopd in the medium term; achieving this target will require production from the planned Mayaro Sandstone wells. Currently the Company is unable to commit to this drilling programme, hence an increase in production will be delayed.

Icacos Oilfield, (LGO 50%)

Located in the extreme southwest of the island the Icacos Oilfield ("Icacoa") is operated by the Territorial Services Group (a subsidiary of Touchstone Exploration Inc).

  • 1,960 acres onshore, producing since 1960’s
  • Very limites available seismic data
  • Recent exploration is limited to shallow horizons
  • Average production of approx. 35 bopd
  • Additional development potential and possible deeper targets

Cedros Leases (LGO 100%)

LGO holds a number of new 100% LGO owned private petroleum leases acquired in 2011 and 2012 covering some 1,752 acres of prospective, underexplored, lands around the Icacos Field. LGO's title to its 100% owned Cedros leases have now been accepted by the Ministry of Energy and Energy Affairs, who are in the process of issuing a Private Petroleum License for those leases.

 

BOLT - Shallow and Deep Rights

LGO entered into a Letter of Intent with Beach Oilfield Limited ("BOLT") to cross-assign the interests of the two companies within the Cedros Peninsula at stratigraphic levels below 7,000 feet. Exclusivity on this agreement currently runs to 31 March 2017, however, this can be renewed by mutual consent.
 
Leni Trinidad Limited (“LTL”), a wholly owned subsidiary of LGO will be the operator of the combined leases and will hold a 100% working interest of the deeper rights, with BOLT receiving an overriding royalty on any future production revenues. 
Progress continues to be made on bringing this arrangement into effect and on completion of this transaction LGO will hold interests in over 10,900 acres of private petroleum leases in the Cedros Peninsula.
 
On the 12th October 2015 LGO acquired a 25% direct interest in BOLT.  Through this acquisition LGO now has access to an interest in the shallow petroleum rights above 7,000 feet held by BOLT, including the producing Bonasse Oilfield. 

Trinidad Growth Potential

The onshore oilfields of southern Trinidad perfectly fit LGO’s strategy of acquiring and redeveloping oil and gas fields with unexploited reserves. Using new technology and making investments in work-overs, new facilities and infill wells LGO expects to substantially increase the production from its acreage in Trinidad in the next few years. Additional opportunities exist to add further assets in Trinidad from thirs party operator, Petrotrin or from the State, and there is also untapped exploration potential associated with each of LGO’s fields.
 
LGO seeks to maintain high quality relationships with all stakeholders and to be considered as a partner of choice in the ongoingj development of onshore resources in Trinidad. The Trinidadian Minister of Finance recently stated that there were 3 billion barrels of oil to be recovered onshore in Trinidad and LGO seeks to pay a leading role in that effort.

ARKeX FTG survey South West Peninsular, Trinidad

LGO, as an original participant and licensee, is uniquely placed to benefit from the Full Tensor Gravity Gradiometry ("FTG") survey that covers approximately 5,700 square kilometres prospective onshore and near-shore areas in Trinidad.

The survey was successfully completed in early 2015 by ARKeX Limited ("ARKeX") and will enable LGO to integrate the data into existing technical studies at Goudron as well as to better understand the Cedros Peninsula and other areas of onshore Trinidad where the Company holds approximately 10,900 gross acres of underexplored prospective leases.   

LGO Energy sees oil drilling opportunities in Trinidad across horizons - TipTv, 9th September 2015, 12:16mins