Published: Dec 22, 2016

Courtesy of ADX Energy Ltd

Nilde Field Development Planning MOU

ADX and Calm Oceans Pte Ltd (COPL) enter into MOU to jointly progress a Field Development Plan for the Re-development of the Nilde utilising COPL’s leased self-install platform facility

KEY POINTS

  • COPL has developed and constructed a self-installing Mono Column Platform (MCP) and is designing a gravity based mooring, storage and offloading system (RPSO) ideal for the redevelopment of the Nilde Field.
  • The MCP is capable of supporting a drilling rig, production processing equipment, water and gas reinjection facilities as well as accommodation.
  • COPL intends to supply the MCP and RPSO to ADX on an agreed lease dry boat charter basis.
  • COPL will assist ADX to secure additional topside facilities (production and drilling) at competitive rates from third parties or purchase equipment on an open book basis and lease these to ADX at an agreed lease rate based on an agreed rate of return.
  • This innovative option enables the field to be re developed with reduced well costs (less 60%) utilising a platform drilling rig, enabling dry trees and reinjection of produced fluids to ensure environmental compliance.
  • ADX plans to complete subsurface development studies, reserves studies including a third party reserves or resources assessment during the first quarter of 2017.
  • COPL will provide surface facilities capital costs, operating costs, lease rate data and engineering design details required to submit a Development Plan to the Italian Authorities by June 2017.
  • ADX believes the MCP and RPSO is technically superior option providing significant capital cost and operating cost savings as well as superior operability due to the ability for well intervention though out the project life.
  • The owner of COPL, Mr Brian Chang, brings an extensive track record in development engineering, fabrication and installation. The combination of ADX geotechnical experience with COPL’s facilities engineering capability significantly enhances the Nilde project both technically and financially.

* ADX has commenced a process with the Italian Designated Authority to convert the exclusively awarded application to a ratified licence. This process was commenced after the award by the Ministry of Industry. ADX believes ratification will occur during the first quarter of 2017.

The MCP and RPSO option schematic – incorporating production, storage and drilling capability with dry well heads. Source: Calm Oceans Pte. Ltd, Mono Column Platform and storage technologies are proprietary, patented and patent pending.

The MCP option provides the ability to drill and immediately produce minimising the time between capital expenditures and revenue. The economics of the system are further enhanced by the self install nature of the system which does not require the pre installation of expensive mooring systems, subsea well heads and subsea trees, subsea control systems and high pressure flexible flow lines.

The major economic driver is a reduction in drilling costs and completion costs of approximately 60% compared to subsea options. This is partly due to the reduced drilling spread rate, the simplicity of dry wellheads at surface which do not require subsea control and tie back systems.

A significant operational advantage and risk mitigating factor is the ability to re-enter wells at any time or the cost effective ability to drill additional wells to maximise oil recovery. The costs of the platform  drilling option is enhanced by the ability to purchase a high specification drilling rigs at highly discounted values.

The nature of the COPL and ADX relationship is expected to yield substantial cost savings in accessing third party equipment in the current turn down environment. COPL is willing to purchase equipment and lease it back to ADX on an open book cost basis there by taking advantage of reduced equipment costs. The re-deployable nature of the MCP platform enables other discoveries in the permit to be developed economically as well as already identified high value near field exploration targets.

“Ian Tchacos, Executive Chairman said, ADX is very pleased to be working closely and aligned with COPL. This MOU enable ADX to utilise COPL’s extensive experience and competencies for the benefit of the Nilde project. We welcome the ongoing support of Brian Chang and his team. COPL has incurred significant engineering costs undertaking project definition work as well as endeavouring to procure third party services on the best potential terms for the benefit of the project. The incorporation of the innovative and cost effective mono column concept is expected to deliver technical, economic, environmental and operational benefits for the re development Nilde thereby and enhancing the projects ability to secure funding. This type of collaborative / aligned arrangement is what is required to deliver low cost projects, take advantage of synergies and access equipment on attractive terms.”

Nilde Area Background

The Nilde oil field was discovered by ENI in shallow water offshore Sicily and came on stream with one vertical well (Nilde-2) in 1980 when the oil price was US$37 per barrel. High productivity of light oil (API 39) was achieved (around 10,000 bopd from Nilde-2) in shallow reservoirs at a depth of approximately 1500 meters. The Nilde 2 well produced at high rates for over 7 years. A horizontal production well was drilled very close by (less than 1km) in 1986 to increase production to 12,000 bopd when oil prices started to decrease significantly. Both wells had subsea wellhead completions that were tied in to an FPSO (Figure 1 below) which essentially was a converted tanker tied to a so called SALS (single anchor leg storage system) system. The FPSO was subsequently upgraded and used for the ENI operated Aquila oil field.

Late life well performance was affected by an interpreted strong water aquifer which resulted in an increase in water cut which could not be remedied due to the lack of provision of production facilities capable of artificially lifting the wells. The decision was made prematurely to abandon production instead of drilling additional development/appraisal wells within potentially undrained areas in the field in 1988. The decision to abandon is reported to have been triggered by a collapse in oil price to US$14 per barrel.

In addition to developing the Nilde field, ENI also made several oil discoveries in the area, notably nearby Nilde-Bis wells, Norma-1 and Naila-1 which were all successfully tested and proved the presence of both light oil and the excellent Miocene age Nilde carbonate reservoir. To date these discoveries remain undeveloped.

Figure 2: d363 CR.AX Permit showing Nilde Field and proximal discoveries. Exploration prospects shown in yellow.

Figure 3: Nilde & Nilde Bis Oil field hydrocarbon pore volume map generated from detailed 3D geocellular model (Petrel). Case shown is currently the “best technical” case

The following table summarise the results of the independent evaluation of the Contingent Resources from the Nilde Area from the Senergy report announced on 17 February 2016:

The above evaluation by Senergy was based on the volumetric estimation method.

Notes Contingent Definitions:
1 Contingent Resources: those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations but, for which the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies.
2 1C, 2C, 3C Estimates: in a probabilistic resource size distribution these are the P90 (90% probability), P50, and P10, respectively, for individual opportunities.
3 Totals are by arithmetic summation as recommended under PRMS guidelines. This results in a conservative low case total and optimistic high case total.