Canada listed oil exploration and production company Decklar Resources has agreed a deal to purchase all of the issued and outstanding ordinary shares of Purion Energy Limited, a Nigerian entity operating on Asaramatoru Oil Field.
The above development means Decklar Resources alongside Prime Exploration and Production Limited will take over the development of Asaramatoru Oil Field which is located in OML 11, the same block where the company is also currently developing the Oza Oil Field.
“The participation in the proven Asaramatoru Oil Field is another significant milestone for Decklar in our growth strategy of acquiring and developing near-term cash-flow generating assets in Nigeria’s Niger Delta region,” Duncan Blount, CEO of Decklar, stated.
The Share Purchase Agreement (SPA) terms are based on the issuance of up to 5,500,000 common shares of Decklar, as consideration for the acquisition of all the issued and outstanding Purion Shares.
Initial issuance of 3,750,000 shares will be completed, and in the event Purion enters into an Risk Finance and Technical Services Agreement (RFTSA) in respect of the Suffolk interest, an additional 1,750,000 Decklar Shares will be issued to the shareholders of Purion.
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“With the acquisition of the interest in the Asaramatoru Field, we expect that Decklar will be producing from two oil fields, the Oza Field and the Asaramatoru Field, by the end of the year,” Decklar Resources said.
Decklar and Prime’s next planned stages for development of the Asaramatoru Oil Field include pulling out the existing tubing from the AST-1 and AST-2 wells, running cement bond logs and cased hole reservoir saturation logs and running new dual-string completions in both existing wells.
“It is then anticipated that an additional seven wells will be drilled for full field development, and production facilities, flow lines, and export facilities will be installed in phases as the field development progresses,” Decklar Resources said.
The Transaction will be subject to customary conditions precedents to completion, including approval of the TSX Venture Exchange.
The full field development plan will include the expansion of the processing facilities to enable processing of up to 20,000 barrels of crude per day for the expected peak production levels including installing a 10 km export flow-line from the Asaramatoru Oil Field to a tie-in point at the Oloma Flow Station which is connected to the nearby Bonny Export Terminal.
The Asaramatoru field was formerly operated by Shell Petroleum Development Company of Nigeria who discovered the oil field in 1973 with the drilling of the AST-1 well, which discovered 10 hydrocarbon-bearing reservoirs.
The AST-2 well was drilled by SPDC in 1989 and discovered additional oil reservoirs in a separate fault block. SPDC never placed the two wells on production and suspended both wells after the drilling and completion activities.
The Asaramatoru field was awarded to Prime and Suffolk Petroleum by the Federal Government of Nigeria in 2004 as part of the first Marginal Field Program. A subsidiary of Prime was appointed operator of the field.
Prime and Suffolk re-entered the existing two wells and commenced initial production testing activities in 2014. The wells produced an average of 2,700 barrels oil per day during intermittent production over three years, with the crude production being barged to an offshore facility for storage and export.
The two wells have been shut in since late 2018 due to lower oil prices and logistics connected with barging and export activities, and limited storage facilities at the well locations.
