Range Resources clears green tape for Beach Marcelle development
Range Resources (ASX: RRS)
is on track to increase both production and reserves after receiving
environmental approval to start its development plans for the Beach
Marcelle licence in Trinidad.
This includes the key enhanced
recovery waterflood program that is targeted to add between 3,000 and
3,500 barrels per day (bpd) of oil to its production for at least eight
years.
The Certificate of Environmental Clearance approvals from
the regulatory authorities cover 40 wells, 8 well deepenings and the
start of the enhanced recovery waterflood program.
Final project
plans will be submitted to the regulatory authorities for final formal
approval and operations are scheduled to being in the first quarter of
2014.
The principal development strategy will be to convert
undeveloped Proved Reserves into production and cash flow while seeking
to add new Proved Reserves through the upgrade of existing Probable and
Possible Reserves through further drilling and testwork.
It also
targets undeveloped Proved Reserves associated with secondary recovery
projects such as the Beach Marcelle waterflood program.
Once
production and cash flow from development of Range’s Proved Reserves
have been increased, field extensions, exploratory prosects and
unconventional resource potential will be tested.
Waterflood Program
Range
has already completed the Beach Marcelle project development plans and
recently presented its waterflood development program to Trinidad’s
state petroleum company, Petrotrin.
It is also assessing the
potential use of nitrogen injection to further increase production rates
and recoveries from the field while leading to additional increases in
Proved Reserves.
Development opportunities in Beach Marcelle
includes infill drilling within under-drilled fault blocks and
waterflooding for increased oil recovery.
With 75%, or 12.8
million barrels, of Range’s undeveloped Proved Reserves associated with
the Beach Marcelle waterflood project, its focus remains on expediting
the on-going engineering and simulation phase of the waterflood program,
in parallel with moving a rig to the field to begin well integrity and
workover operations.
In addition, its technical teams has
identified additional potential recoverable volumes that it will seek to
certify as reserves after full appraisal.
The waterflood program
builds upon 3 previously successful, but prematurely abandoned
waterflood programs performed by Texaco in the 1950's.
It is
expected that with the use of modern reservoir and waterflood simulation
technology, Range will be able to more efficiently sweep the remaining
recoverable reserves.
Conventional Program
Range
is also evaluating the option to deepen up to 8 wells along with the
drilling of 40 wells which could include in-fill / step out and further
appraisal wells.
Successful deepening of existing well bores is
expected to recover up to 90,000 barrels per well at initial production
rates of 80bpd each and at costs significantly lower than drilling and
completing new wells.
Beach Marcelle
The
Beach Marcelle field comprises 3,964 acres and falls within the
Guayaguayare sub‐basin that has numerous oilfields around its rim,
including the Navette and Goudron fields and the offshore Galeota and
Samaan fields.
The first well in the Beach field was drilled in May 1902. A comprehensive field map was compiled by
Texaco and to date approximately 230 wells have been drilled on the license.
Previous owners had maintained a well ordered database and Range has access to this comprehensive set of basic subsurface data.
Oil
gravities within Beach average 34 degrees API and cumulative oil
production to date has been 30.4 million barrels at an average of
125,000 barrels per well.
The main producing horizons are the
Upper, Middle and Lower Gros Morne formation, which are geologically
equivalent to the Forest formation in Morne Diablo and South Quarry,
that range in depths from 300 feet to 500 feet.
Oil is currently produced from eleven wells at a rate of roughly 22bpd per well.
Analysis
Environmental
approval for Range Resource’s Beach Marcelle waterflood program allows
it to unlock its largest block of undeveloped Proved Reserves of 12.8
million barrels of oil, or 75% of its total.
That this is
expected to add between 3,000 and 3,500 barrels per day of oil once
completed, well above its oil production of just under 700bpd in the
September quarter of 2013.
Potential also exists for further recoverable volumes to be certified as reserves.
2014 is shaping up to be a pivotal year for Range with share price catalysts including:
- Start of the Beach Marcelle waterflood program;
- Drilling of conventional Beach Marcelle wells;
- Results from drilling at the Morne Diablo field; and
- Results from the initial exploration well at the Guayaguayare farm-in block in early 2014.
