Leni Gas & Oil (LGO) has announced that drilling on the Eugene Island field in the Gulf of Mexico could begin next week, with the Ocean Columbia jack-up rig arriving imminently.
The company approved additional drilling in December 2011 at the field operated by Marlin Energy, in which LGO holds a 7.25% working interest. The rig has now been released by the previous operator and will be mobilised to the Eugene Island platform, weather conditions permitting. The drilling programme will start with the A-2ST01 well, a sidetrack of the existing A-2 well, which targets mean recoverable reserves of 0.5 million barrels of oil within the Tex X2 target level.
The slightly deeper Tex-X3 reservoir will also be tested by the well and both the reservoirs are productive in other wells throughout the field. The partners have budgeted a total 16 days for the drilling and evaluation and drilling, while re-completion work at EI-184 is expected to follow work on the A-2ST01 well.
The net cost of drilling, logging and evaluating the A-2 sidetrack will be an initial $280,000 and any incremental production is expected to be realised quickly with a short payback period on the investment. Only recently, LGO announced a tie-up with Range Resources to jointly develop onshore oilfields in Trinidad, a deal which will see Range acquire a 50% stake in LGO's Goudron oilfield in a deal worth $8m. Furthermore, LGO has an option to acquire a 15% stake in Range's Beach Marcelle project by spending a maximum of $7m.