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Vaalco nears rig release

The Topaz Driller is executing Vaalco's work programme off Gabon
The Topaz Driller is executing Vaalco's work programme off Gabon

Gabon-focused Vaalco Energy has completed the South East Etame 4H well at 2,200 barrels per day of oil.

Of this amount, 600 bpd is net to Vaalco’s 31.1% stake in the Etame Marin licence. In February, the company had predicted production would be 1,200-2,500 bpd gross.

The well produces from around 750 feet (228.6 metres) of horizontal section in the Gamba reservoir.

Vaalco is also working to restore production at the South East Etame 2H well, which is expected to restart at the end of the month. This should produce at around 2,400 bpd gross.

The recently concluded drilling campaign has been “transformational” for the company, Vaalco’s CEO Cary Bounds said. “We have drilled and brought online three development wells and drilled two successful appraisal wellbores that confirmed additional resources to exploit from this quality asset.”

This work has brought its operational breakeven down to $31 per barrel of realised pricing. Vaalco has also hedged production, giving it some protection from recent declines in global benchmarks.

The coronavirus outbreak has not yet had an impact on Vaalco’s work, Bounds said, with the company’s contingency plans in place. “We remain committed to generating long-term value for our shareholders by focusing on capital efficiency, controlling costs and optimizing production.”

Once work on the South East Etame 2H has been finished, the drilling rig will be released with no plans for more workovers.

The company’s 2019 results, released earlier this month, said it had around one third of its production hedged until June of this year at an average price of $66.7 per barrel.

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