Aje Field Hosts FPSO as MX Oil Pulls Out

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Party to the development of Aje Field, offshore Lagos, Panoro Energy, has declared that oil output from the field is imminent as the key production facility sails down to site.

According to the company, the floating production, storage and offloading (FPSO) vessel for the Aje field is now in transit from Singapore.

The vessel is expected to arrive in Nigeria mid-March 2016, following a brief stop in Cape Town.

All key equipment related to the field development has been delivered to Nigeria, the company said, adding that anchor handling operations in the field started in January and would continue until mid-February.

The construction vessel has also commenced operations and would install the subsea equipment including the manifold and flowlines this month. Once the FPSO arrives in Nigeria it is billed to be hooked-up to the mooring system and risers and a short test of the production systems will be conducted.

Panoro had earlier declared that Aje first oil is expected after completion of work on the FPSO.

Anchor handling operations at the Aje field which started in January is to precede conclusion of subsea equipment including the manifold and flowlines.

Panoro holds a 6.502 percent interest in the field. Its partners are Yinka Folawiyo Petroleum, New Age, Energy Equity Resources and Jacka Resources. One of the investorsin the field, MX Oil, is pulling out.

MX Oil had declared that its directors believe a sale of its Nigerian investment is an attractive option for the company and signed a term sheet with the proposed purchaser who is part of an established international oil and gas group.

Under the terms of the proposal, the company will receive $18 million for the sale of its investment upon meeting certain conditions.

Initially up to $3.5 million will be advanced to MX Oil in two stages after the signing of binding legal documentation. These funds will be used to finance the remaining cash calls expected to be required for the investment in order to bring the underlying asset into production.

The proposed purchaser will then have the right to acquire the investment, which is most likely to be when initial oil production commences.

“On exercise of this acquisition right, the company will receive one payment of $5.75 million and then a second payment of $5.75 million six months later. The balance of $3 million will then be paid in three annual $1 million installments from the date of the exercise of the acquisition right, although these payments may be accelerated in the event that the oil price exceeds $45 per barrel for a three month period.”

The company stated it is moving towards the signing of legal documentation within the next few weeks upon completion of due diligence.

Panoro’s CEO, John Hamilton, said: “We are excited to be approaching first oil at Aje, offshore Nigeria. Significant operational and contractual progress has been made on the final phase of field development. With the drilling phase now concluded, the installation work and the arrival of the FPSO are the main remaining work streams. The field is expected to be producing by the end of March 2016.”

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