Houston independent Vaalco Energy Inc. maintains its 2016 production guidance of 3,700-4,500 boe/d, noting that a malfunction with pumps on one well offshore Gabon is being resolved. Meanwhile, Vaalco renegotiated terms with Transocean Ltd. after releasing the Constellation II rig offshore Gabon.
Second-quarter production averaged 4,700 boe/d, up 4% from the first quarter, Vaalco said.
On June 23, electrical submersible pumps (ESPs) in the South Tchibala 2-H well failed offshore Gabon, resulting in the well being temporarily shut-in. Before the shut-in, South Tchibala 2-H produced 1,700 b/d of oil gross, or 415 b/d net to Vaalco.
Vaalco plans to move a hydraulic workover unit onto the Avouma platform to replace the ESPs. The well is expected to be back on stream by early fourth quarter. The independent selected a hydraulic unit because it was less expensive than using a jack up rig.
Net cost to Vaalco is expected to be $1.5 million. Separately, Vaalco will pay $5.1 million net for its interest for unused rig days in the Transocean contract for the Constellation II rig.
Terms call for Vaalco to pay the $5.1 million, plus Vaalco’s share of demobilization charges, in seven equal monthly installments starting in July.
Steve Guidry, Vaalco’s chief executive officer, said, “While low oil prices were the primary factor in our releasing the rig, the benefit of our drilling program through that point was further evidenced in the second quarter.”
Vaalco has exploration, development, and production activities in Gabon, Equatorial Guinea, and Angola.
A floating production, storage, and offloading vessel is used for the Etame Marin block production offshore Gabon, which includes Southeast Etame and North Tchibala fields (OGJ Online, Aug. 29, 2014).