Petsec Energy completes acquisition of Damis License onshore Yemen

rig yemen estebanmonclova flickrAustralia’s Petsec Energy has acquired a 100 per cent participating interest and 82.5 per cent equity interest and operatorship of the Damis (Block S-1) Production Licence in Yemen

The licence holds five sizeable oil and gas discoveries — the developed and producing, until suspended in 2014, An Nagyah oilfield, and four undeveloped oil and gas fields within the licence area namely Osaylan, An Naeem, Wadi Bayhan and Hamel.

The An Nagyah oilfield commenced production in March 2004 and has produced 25mn barrels of oil to-date from 25 wells, reaching a peak oil rate of 12,716 bpd in March 2006. The field was producing at a limited rate of 5,000 bpd, when it was shut in at the end of February 2014.

Canadian reserve engineers DeGolyer and MacNaughton Canada Limited have been commissioned to undertake an economic reserve audit to assess the remaining economic benefit to the company. These results will be released in due course, Petsec Energy said.

The Damis (Block S-1) Production Licence is located approximately 80 km to the southwest of the company’s exploration Block 7, which holds the Al Meashar oilfield discovery in the Sab’atayn Basin in central West Yemen.

The block is currently subject to force majeure due to the current political issues in Yemen and inability to ship oil from the West coast of Yemen at the export pipeline terminus for the An Nagyah oilfield.

Maki Petkovski, CEO of Petsec Energy (Middle Eastern) Limited, said, “The Damis (Block S-1) Production Licence acquisition materially increases the company’s developed oil and gas reserves and provides further major development opportunities which, when developed, would substantially increase the block’s oil and gas production.

“The block contains significant existing infrastructure, including surface facilities with a capacity to process up to 20,000 bpd and an 80,000 bpd pipeline, which joins the 200,000 bpd Marib export pipeline to the Ras Isa terminal on the Red Sea Coast to the West. Excess capacity exists in the Marib export pipeline for restart of the An Nagyah oilfield and for future development of the remaining undeveloped oilfields in the Damis (Block S-1) Block.”

Terry Fern, Petsec Energy’s chairman, added, “We are very pleased to have finally secured the developed An Nagyah oilfield that can be brought back into production soon after shipping and refinery acceptances recommence in Yemen, which we are hopeful will be this year.

“The anticipated cash flow from An Nagyah production will provide the necessary capital to develop the substantial oil reserves we have secured in Block Damis S-1 and Block 7. This substantial increase in the company’s oil and gas reserves added to the significant discoveries made in the USA in 2015, has materially increased the underlying value of Petsec Energy despite the current low oil prices.

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