Oroco Field Operational Update: Mobilisation of Rig for Ororo Field Drilling Program

Tuesday 13 March 2018

Sirius Petroleum, the Nigeria focused oil and gas development and production company, is pleased to announce that the Company’s international rig partner COSL has now received preliminary Location Approval from the Marine Warranty Surveyor for the Ororo-2 and Ororo-3 wells and has commenced mobilisation of the jack-up rig for delivery direct to Nigeria.

Furthermore, COSL have optimised the drilling campaign for Sirius by electing to deploy the COSL Force jack-up rig as opposed to the COSL Power. The COSL Force is a “hot rig” (tooled-up and ready to operate) currently offshore UAE and is therefore ready to be mobilised to Nigeria shortly. The COSL Force is a new-build state of the art rig which has a rated operating water depth of 375 ft and a rated drilling depth of 30,000 ft.

Once on station, it is anticipated, weather conditions permitting, that drilling of the Ororo-2 well will now commence in April 2018 and that drilling will be in a location close to the Ororo-1 well (originally successfully drilled by Chevron in 1986).

The Ororo-2 well is planned to penetrate all of the D sands, with the top three sands (D1, D2 and D3) being sampled and pressure tested. The objectives of the tests are to determine gas-oil contacts, the pressure regimes, fluid compositions, and in-situ gas-oil ratios ahead of an extended well test. The well will then be drilled down to the deeper G sands where it is expected to be completed for production.

According to the Ororo CPR produced by Rockflow Resources and set out in the Company’s admission document, it is estimated that the Ororo-2 well will initially produce approximately 2,700bopd of light oil and 6mmcfd of gas. Rockflow estimates that the Ororo asset has a Mid Case Net Present Value to Sirius (NPV10) of $96m, based on a $65 per barrel flat real oil price for the life of the field.

In addition, Sirius has concluded amended terms with COSL for the COSL Force jack-up rig, extending the initial program to cover both the Ororo 2 and Ororo 3 drill programs for a lump sum of $9m (payable in instalments related to drilling milestones), on the assumption that the duration of the work will not exceed 90 days from the spud of the first well in the program and assumes a 45 day work duration per well. If the duration of the work exceeds that period, then daily rates will thereafter apply. In accordance with the amended agreement, Sirius has made an initial deposit payment of $1.5m to COSL.