NU-Oil and Gas (NU-Oil) has concluded a production sharing agreement with PVF Energy Services for PL2002-01(A) in Newfoundland, Canada, through its wholly owned subsidiary Enegi Oil.
This five-year agreement enables the NU-Oil to receive 50% of net revenue from production after the recovery of any costs incurred by PVF in carrying out its obligations under the agreement.
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PVF will cover all costs related to an agreed work programme to restore production from PL2002-01(A).
In addition to PVF providing 100% of the funding for the work programme, it will fund 100% of ongoing operations on PL2002-01(A) in return for 50% of revenues from production after the recovery of its costs in accordance with the agreement.
The work programme will involve two stages, the first with a coiled tubing or wireline operation, followed by a workover to recomplete the well and insertion of an artificial lift system.
PVF has established a consortium of engineering and services companies to complete the work programme.
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By GlobalDataThis consortium includes Ecan Energy Services (Ecan) and Innovative Development Design Engineers (IDDEL).
Ecan Energy Services has stationed its Rig #3, an XJ400 workover rig at Stephenville, around 50km from the PL2002-01(A) well site and this rig is expected to be used to undertake the work programme. This is, however, subject to availability and regulatory approvals.
It is planned that the work programme will begin once weather conditions become suitable and all regulatory approvals are granted, which are likely to be in this year's second quarter.
The agreement also enables PVF to drill additional wells, and the two firms expect to negotiate a farm-in agreement to cover in this regard in the near future.
