CALGARY, AB, May 11, 2021
/CNW/ - Pan Orient Energy Corp. ("Pan Orient" or the "Company")
(TSXV: POE) is pleased to provide an update on the drilling program
in Thailand.
THAILAND
Concession L53 Onshore (Pan Orient Energy (Siam) Ltd., in which
Pan Orient has 50.01% ownership)
On March 18, 2021 the Company
reported that a two to three well appraisal drilling program had
commenced with the L53-DD10 well which had just completed drilling,
and that it would be followed by the L53-DD12 well, and possibly a
L53-DD11 well. It was also reported that the L53-DD10 well
had encountered approximately 38 meters of combined net oil pay
within the AA, BB, CC and EE sands.
The Company finished drilling of L53-DD12 and L53-DD11, and the
perforation of L53-DD11 on April 26th
and then began completion operations on L53-DD10 and
L53-DD12. In addition, there is a workover program on L53-DD2
(just completed), L53-DD3 (underway) and L53-DD7. Of note, in
anticipation of Thailand
interprovincial Covid restrictions due to the recent wave of
infections, the decision was made to utilize the drilling rig for
the well completions and workovers at a day rate cost that was
reduced by the drilling contractor to the same rate as a service
rig.
L53-DD10 Appraisal Well
L53-DD10 has averaged 702 BOPD (351 BOPD net to Pan Orient's
50.01% equity interest) from the CC sand since May 3rd with a water cut of 55.0%. The well
will remain on long-term production. Test results are not
necessarily indicative of long-term performance or ultimate
recovery.
L53-DD11 Appraisal Well
L53-DD11 encountered a total net oil pay of approximately 32.1
meters within the AA, CC, BB and DD sands. The well was perforated
in the CC sand and has averaged 1,087 BOPD (544 BOPD net to Pan
Orient's 50.01% equity interest) with a water cut of 7.5% since
April 29th. The well
is currently on long-term production. Test results are not
necessarily indicative of long-term performance or ultimate
recovery.
L53-DD12 Appraisal Well
L53-DD12 encountered approximately six meters of oil pay above
the oil water contact within the CC sand in a structural position
approximately 20 meters structurally lower than the L53-DD6ST2
well, which is approximately 220 meters to the north. Given the
water disposal constraints at the L53-DD field, the high cost of
trucking water and the ability to provide pressure support to the
up-dip L53-DD6ST2 well, the decision was made to forego the
completion in the CC sand and convert L53-DD12 to water injection.
Water injection commenced on May
10th with anticipated maximum capacity of approximately
7,200 barrels of water per day, approximately the same as at the
existing water disposal well L53-DD8. This will make for a combined
water disposal capacity of 14,400 barrels of water per day at the
L53-DD field site and negate the need for water trucking for quite
some time.
L53-DD Well Workover Program
A workover was completed at L53-DD2 during the period of
May 2nd to May 8th. A workover
on L53-DD7 has commenced and will be followed by a workover on
L53-DD3. The aim of the program is to optimize and increase
production.
Concession L53 Production
Concession L53 oil sales (on a 100% basis) averaged 2,846 BOPD
in February, 2,351 BOPD in March, 2,431 BOPD in April, and 3,445
BOPD from May 1st to May 9th.
Net to Pan Orient's 50.01% equity interest, oil sales
averaged 1,423 BOPD in February, 1,176 BOPD in March, 1,216 BOPD in
April, and 1,723 BOPD from May 1st to
May 9th.
In addition to the approximately 200 BOPD (on a 100% basis) that
has been shut-in since May 2nd when
the L53-DD2 well workover commenced, and approximately 170 BOPD (on
a 100% basis) when the L53-DD3 workover commenced on May 7th, there has been production
disruption for a number of additional wells in order to facilitate
the rig moves from well to well.
As is the case with fields possessing significant aquifer
support (water drive), the key to L53-DD oil field production
optimization will be the ability to handle significant quantities
of water, which will increase substantially over the life of the
field, at low cost. The economic threshold of each well is highly
sensitive to the operating costs experienced in the "tail" of the
oil decline curve, where a large portion of the ultimately
recoverable reserves are produced. In the case of offshore
production, the operating costs are substantially higher than the
very low operating costs the Company has managed at the L53-DD
field.
Oil Sales Pricing
The realized oil price for the first quarter of 2021 was
US$57.65 per barrel, a substantial
increase over the 2020 first quarter average of US$47.02 per barrel. Management notes that the
April 30, 2021 escalated price
forecast of Sproule and Associates for the Brent crude oil
reference price indicates an average for 2021 approximately 23%
higher than the December 31, 2020
escalated price forecast used in the December 31, 2020 reserve report for Pan Orient
Energy (Siam) Ltd.
COVID-19 Coronavirus
The operations in Thailand of
Pan Orient Energy (Siam) Ltd. ("POS") continue to be somewhat
affected by the worldwide COVID-19 coronavirus pandemic. The
Thailand government imposed a
state of emergency in late March
2020, giving it wide-ranging powers to address the
crisis. Domestic travel restrictions have now been eased but
a travel ban on most foreigners entering Thailand remains in effect. Prudent
measures have been taken by POS to help protect the health and
safety of staff, which are of paramount importance.
Fortunately, POS in Thailand has
been able to complete its initial three well 2021 appraisal
drilling program. POS and Pan Orient are well-positioned to
withstand these unprecedented events. The Company is
optimistic about a return to normal operations and less volatile
market conditions but the outlook for world oil prices remains
somewhat uncertain.
Pan Orient is a Calgary,
Alberta based oil and gas exploration and production company
with operations currently located onshore Thailand and Western
Canada.
This news release contains forward-looking information.
Forward-looking information is generally identifiable by the
terminology used, such as "expect", "believe", "estimate",
"should", "anticipate" and "potential" or other similar
wording. Forward-looking information in this news release
includes, but is not limited to, references express or implied to;
well drilling programs and drilling and testing plans and
information on future production. By their very nature, the
forward-looking statements contained in this news release require
Pan Orient and its management to make assumptions that may not
materialize or that may not be accurate. The forward-looking
information contained in this news release is subject to known and
unknown risks and uncertainties and other factors, which could
cause actual results, expectations, achievements or performance to
differ materially, including without limitation: imprecision of
reserves estimates and estimates of recoverable quantities of oil,
changes in project schedules, operating and reservoir performance,
the effects of weather and climate change, the results of
exploration and development drilling and related activities,
supply, demand and resulting prices for oil and gas, the impact of
the COVID-19 coronavirus; commercial negotiations, other technical
and economic factors or revisions and other factors, many of which
are beyond the control of Pan Orient. Although Pan Orient
believes that the expectations reflected in its forward-looking
statements are reasonable, it can give no assurances that the
expectations of any forward-looking statements will prove to be
correct.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Pan Orient Energy Corp.
