OMV lowers capex, finds drilling success on Romania’s Neptun Deep block

OMV AG reported in a May 11 conference call that its overall capital spending was down in this year’s first quarter compared with the same quarter in 2015. Spending for the first quarter was 34% lower than the same period in 2015. Upstream exploration expense was down 24% with a decrease of 13% in dollars per boe for upstream operating expenses in first-quarter 2015.

In February the company reported it would deemphasize growth of oil and gas production under a new strategy that would safeguard cash flow (OGJ Online, Feb. 18, 2016). This came on the heels of a €1.1-billion loss attributable to shareholders for 2015 after a €278-million profit in 2014.

Despite a reduction in exploration outlays, the company also reported that its second exploration drilling campaign in the Neptun Deep block in the Romanian Black Sea was completed in January. The majority of the seven-well campaign encountered gas, and the company is now continuing its analysis of reservoir data to determine full block potential.

The Neptun Deep block covers 7,500 sq km in 100-1,700 m of water. OMV and ExxonMobil Exploration each hold 50% of the Neptun Deep block with ExxonMobil as operator. Production Romania Ltd. holds the remaining 50%. Initially acquired in November 2008, OMV announced its Domino-1 discovery in 2012. Preliminary estimates were placed at 42-84 billion cu m of natural gas. Domino-2 completed drilling in October 2014, but the operator has not updated specifics for its most recent Neptun drilling campaign.

In its conference call, OMV said it expects exploration and appraisal expenditure to be €450 million in 2016.

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