Tuesday, April 05, 2011
Jubilant Energy N.V.
Jubilant provided its trading statement and operational update for the year ended March 31, 2011.HIGHLIGHTS
- Producing asset
- Average gross production of 1,809 bopd, equating to 452 bopd net to Jubilant.
- Multiple work programs in place to achieve increased production from Kharsang field through ongoing workover and drilling programs.
- Exploratory drilling planned in mid 2011 for establishing deeper prospectivity of Kharsang field.
- The new production profile and reserve estimates of Kharsang field expected to be announced in before the end of 2011.
- Exploration and appraisal activities
- Srikantabari well in Tripura Block expected to be spudded in May 2011.
- Approval obtained for appraisal program of Kathalchari prospect in Tripura block and over 65% of seismic program completed.
- Topography reconnaissance survey completed in both Manipur blocks and Phase- I seismic program awarded.
- DDE-APP-1 appraisal well in KG spudded on January 1, 2011.
- Spudded first exploration well in Golaghat on March 20, 2011.
- Development activities in KG
- Development drilling in Deen Dayal West expected to commence in August 2011. Well Head Platform expected to be set by May 2011 and Onshore Gas Terminal progressing ahead of schedule. Production Living Quarter Platform and Gas Turbines contract award expected by Q2 2011.
- Management committee, which also includes Government's nominee, has recommended the grant of an extension to the contract area of 20.5 sq kms to the south west of DDW to the consortium, the final approval of which is expected soon.
TRADING STATEMENT
Kharsang Production
The average gross production during the year was 1,809 bopd and working interest production was 452 bopd. In the previous year, gross production was 1,895 bopd and working interest production was 474 bopd. The marginal decline in the current period is due to the need for workover activities designed to increase production and improve the recovery factor.Financing
On March 24, 2011, the Company repaid a USD 50 million EXIM loan facility together with USD 20.9 million of accrued interest. A secured facility from Central Bank of India (CBI facility) was available to fund this loan repayment through the repatriation of proceeds to an offshore entity. As part of its treasury management, the Company has used IPO proceeds for the loan repayment and will use the CBI facility to fund the capital expenditure and other requirements, for which IPO money was raised. The terms of CBI facility have been suitably amended to use the loan proceeds for funding the capital expenditure and other requirements. The drawdown of the CBI facility will be made in tranches as funding is required, resulting in a reduction in the interest payable by the Company, compared to drawing down the entire amount for repayment of the EXIM facility in one tranche.The Company has net debt of USD 213 million. Cash balance and undrawn facilities available to the company total USD 132 million.
Asset relinquishment
In view of the limited potential and commercial viability of the blocks, the company intends to relinquish its 30% interest in the Cauvery and Mehsana blocks. The partners for the Cauvery Block have formally communicated their intention to relinquish the block; however, the costs were impaired in the previous financial year.OPERATIONAL UPDATE
DEVELOPMENT OF DEEN DAYAL FIELD IN KRISHNA GODAVARI BLOCK
Work program on scheduleProduction facilities are currently under planning and execution. Engineers India Limited ("EIL") has been appointed as the project managers The Well Head Platform ("WHP") is being constructed in Malaysia and is expected to be transported to India to be set in place by May 2011. The Onshore Gas Terminal ("OGT") construction is marginally ahead of schedule.
The tenders for Production and Living Quarters Platform (PLQP") and gas turbines were obtained in October 2010 and the contract award is expected to occur in Q2 2011 to achieve commissioning in 2013. The pipeline tender was published in December 2010 and award is also expected in by the end of Q2 of 2011.
Deen Dayal East ("DDE") appraisal well drilling on schedule
The appraisal well DDE-APP-1, located in 101 meters of water, was spudded on 1 January 2011. This is the second appraisal well in DDE area of the KG block. The target depth of the well is 5,634 meters measured depth ("MD") with the objective of appraising the hydrocarbon bearing sands discovered by the KG-16 well. As of 31 March 2011 the well was at 5,344 meters MD (4,544 meters true vertical depth). The cost of drilling this well is expected to be below the original estimated cost of approximately USD 50 million.
Management Committee approval for Deen Dayal West ("DDW") extension area
A decision upon the application to the Government for a grant of contract area extension by 20.5 sq kms in the south west of DDW is expected shortly, which will potentially increase reserves and resources in DDW.
Submission of FDP and Declaration of Commerciality
The Management Committee has approved a 30 month extension of the Petroleum Exploration License (493 sq. km.) to the end of September 2012 to appraise and submit a Declaration of Commerciality ("DoC") for the remaining discoveries on the block. An integrated DoC and FDP will be submitted accordingly.
KHARSANG
The gross production from the field during the current financial year was lower at 660,327 bbls (1,809 bopd), compared to gross production of 691,627 bbbls (1,895 bopd) during the previous year. The marginal decline in the current period is due to work-over activities designed to achieve increased production with an improved recovery factor.The operator is currently carrying out a work-over campaign and is planning to undertake the Phase-III drilling program in mid 2011. This drilling program includes five firm wells and two contingent wells. The program also includes the drilling of a deeper exploration, targeting total depth of approximately 2,600 meters, which will be below the Kharsang thrust.
TRIPURA BLOCK
Appraisal program at Kathalchari-1Based on 137 line kilometers ("lkms") of 2D seismic data, up to two appraisal wells are expected to be drilled to evaluate the original discovery by early 2012. The K-1 well was drilled to a depth of 3,428 meters and flowed at the rate of 5.2 mmcfd from the Middle Bhuban Sandstones in December 2009.
Jubilant is currently acquiring the seismic data for the appraisal of K-1. To date, over 92 lkms have been acquired. It is envisaged that the survey will be completed in late April 2011. The extended production test of the K-1 well is currently being planned and is expected to be tested as part of the overall drilling and testing campaign in Q3 2011.
Spudding of Srikantabari-1 well
The Quippo rig # 3 is currently rigging up on the drilling location and the Company expects to spud the Srikantabari-1 well in May 2011. The well is targeting the Middle Bhuban sandstones together with deeper targets and is estimated to cost approximately USD 11 million (gross). The well will be drilled with managed pressure drilling to a depth of 4,000 meters and is estimated to take approximately 80 days. Depending on geological and drilling conditions, the well may be deepened to test deeper targets.
MANIPUR BLOCKS
Geological mapping currently in progressThe first season of surface geological mapping was started on 20 January 2011 and has already been completed. Balanced cross sections and revised geological maps will now be prepared based on this work and are expected to be completed by May 2011.
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