Sahara’s First Oil Discovery, Appraisal & Production A Presentation to THE LAGOS OIL CLUB by
Curtis Cohen Chief Operating Officer Sahara Group, Upstream September 30, 2014
Outline • Introduction – – – – – – –
The Sahara Group Upstream portfolio Shell & Chevron auctions Tsekelewu MF OPLs 284 & 286 Ghana ECTP Cote d’Ivoire 500 & 502
• Sahara’s first oil discovery, appraisal & production – OPL 274
Introduction • Sahara privately owned, established 1996 • Vertically integrated conglomerate & “incubator”
• 20+ operating companies, 650+ worldwide employees • Trading, Shipping, E&P, Refining, Power, Infrastructure • Nigeria, Cote d’Ivoire, Ghana, UK, Switzerland, Dubai, Singapore
• Audited turnover ~ $11B • CAGR growth past four years up 30% annually http://www.sahara-group.com/our_business.html
Group strategy • To replicate our trading success & accomplishments in infrastructure energy & elsewhere • We invest in people, processes, principal investments, strategic acquisitions & continuous expansion • West Africa focused, expanding regionally then globally
Sahara Group MIDSTREAM
DOWNSTREAM
UPSTREAM
INFRASTRUCTURE
POWER
Sahara Sea Support Services
Sahara Energy Services
So Energy
So Aviation
Sahara Energy Field
Enageed Resource
Sahara Power Resource
KERL (Egbin Genco)
Sahara Bulk Storage
Sahara Trade W Africa
P-Lyne Energy
Sahara Gas
Sahara Energy Field Ghana
Sahara Energy Field Cote d’Ivoire
NG Power
NEDC (Ikeja Disco)
Sahara Energy Intl
Sahara Energy Resource
Sahara Energy E&P
NG Power HPS
Sahara Infrastructure & Investment Vehicle
Upstream portfolio CI-500
CI-502
ECTP
OPL 286
OPL 284
Tsekelewu
OPL 274
OPL 228
Opl 228
Opl 286
?
?
?
Shell & Chevron auctions
OML 55
OML 24
OML 55
OML 18 OML 52
Auction results • Sahara invited to bid on Chevron OML 52, 53 & 55 • Sahara invited to bid on Shell OML 18 & 24 • Formed consortia for both auctions • Stanbic & McDaniel advised Chevron bid • Citi, First Bank & Xodus advised Shell bid • Sahara was finalist but not winner in both • Sahara’s near term growth will be organic
Sahara’s Nigerian assets
OPL 274
NIGER OPL 228
T
D E LTA OPL 284
BASIN OPL 286
Tsekelewu marginal field OPL 274
Tsekelewu
Tsekelewu marginal field section Tsekelewu-01
Tsekelewu -02
Opuekeba -07
Gas Oil Unknown Water
A U1 OUT 1522 U1 OWC @ 1533
U1 OUT 1522 U1 OWC @ 1533
B
U1
U4 U4 GOC @ 1946
U5
U4 GOC @ 1946
U5 GWC @ 1963
U5 GWC @ 1963
U4 GOC @ 1946
U4 ODT 1953
U7 OUT 2201
U7
U7 OWC @ 2212
U7 OWC @ 2212 U8_U OUT 2246
U8_U OUT 2246
U8_U U8_L
U8_L
V2 GDT @ 2573
V2
V2 GDT @ 2573
V2 GDT @ 2573
V3 OUT 2644
V3 OUT 2644
V4 ODT 2751
V3 OWC @ 2662
V3
V3 OWC @ 2662
V4 OUT 2743
U8_U
U8_L OWC @ 2212
U8_L OWC @ 2212
V4
V4 OUT 2743 V4 ODT 2751
V4
V3
V2
U7
Tsekelewu depth map
❶
❷
U8U OWC 2258m
Tsekelewu block limit
❼
Tsekelewu-2 up-dip location SE
❼
❷
Time slice map
NW
Crestal outline on time slice
❶
❷
Area of common contacts
Tsekelewu block limit
Time slice
❼
Tsekelewu block
OPL 284 prospects
OPL 284 DHI
Sahara’s Ghana block
ECTP 1500 km2 85% equity
Sahara’s Cote d’Ivoire blocks 500
502
35% 200 km2
20% 221km2
New CI-502 3D seismic
Nigerian blocks
OPL 274
OPL 274
T
Tsekelewu
OPL 284
OPL 284
OPL 286 OPL 286
OPL 228 OPL 228
OPL 274 Benin City
OPL 274
625 km2 3D
T s e k e
l
e w u
Escravos
Forcados
Warri
Work program time line
Seismic acquisition team
Receiver cable prep
Prepped cable groups
Land seismic
Swamp seismic
Safety vest is obligatory
Drilling shot holes
Seismic shot records
Fast track migration
Seismic processing: Raw PSTM
~20 km
PSTM (time migration)
Depth conversion methods ❶ T-D function
Time
Depth
X
= Big difference
Velocity cube
❷
Depth Velocity density 1.6 M/1000 km2
Time-depth functions from wells
Depth
Time
Wrong well choice in depth conversion risks missing target by 750’
T-D function choice impacts depth conversion
Time
Using wrong velocity, actual trajectory cuts fault, misses deeper targets
Planned trajectory
PSDM (depth migration)
PSTM interpretation
PSDM interpretation
Interpretation difference PSDM
PSTM
1.4 km
Oki-1 cut fault, missed deep pay
PSDM slice 1 km2
Oki-Oziengbe S
PSTM slice
Caveat emptor PSTM 45° strike difference
s p r e a d
1.4 km focused
PDTM
● Displace image ● Focus image ● Raise resolution ● Volume impact ● Target impact (horizon & fault, e.g.,Oki-1)
Spared cost can cost value • Seismic processing commonly stopped after time image • Time image, location, volume is different from depth image • Differences are material, impact – Work program duration, delay, completeness – Missed opportunity – Investment in wrong opportunity (build road, drill well in wrong place)
• Economic consequence include – – – –
Oil in place Reserves Valuation Bankruptcy
• Operators, lenders, investors prone to cutting costs lose value
Drilled wells before doing 3D seismic. $1.3B in lost value!
Hunts Propose $663M Bankruptcy Settlement for Placid Oil http://www.nytimes.com/1988/07/24/us/hunts-propose-a-663-million-bankruptcy-settlement-for-placid-oil.html
OPL 274 prospect inventory Gilli Gilli S New Tonjour
New
Tonjour E
Swamp
Land Scotta
Pologbene
New
New
Oluegi Oziengbe South
Oki
Oki-Oziengbe S & Oluegi fields S2 Oluegi Oluegi
SS1 1 S2
S4
PSDM
S5 S5 Oluegi
Oki S4 Oki
1 km2
Oki-1 cut fault
Oki & Oluegi discoveries S
Oki-1
Oluegi-1
N
Oki-1 cut fault, missed deep pay
N Oluegi
Oki OPL 274 OML 111
S
Oki-Oziengbe S4 Oki-Oziengbe S4
A1 A3
C6 C8 C9
Oki-Oziengbe S5 Oki-Oziengbe S5 Oki-Oziengbe S4
A1 A3
B1 C6 C8 C9
OKI LOCATION PREPARATION
Drill site
Sahara takes the field
Civil engineering
Base camp
Chemical shed
Waste pit form
Waste pit function
Making mud in rainy season is easy
Drilling location & trajectories
Olu1 8500’
3500’
S4
4000’
S5
Drilled trajectories
54°
49° 36°
to N
to SW to S
2 mi
Drilling results summary 0
Piling Fatality, 20” casing, well head
2000
4000
Auto-track failed 13 3/8 casing
Depth (ft)
6000
Lost centralizers 13 3/8” casing, cmt, well head
8000
9 5/8” casing, well head
10000
Stuck tool, fish Logging, 9 5/8” casing, pills & curing mud loss Logging, SWC, VSP, hi torque, early TD
12000
Logging, testing, OP, Oki-BA
14000
Logging, 7” liner run, lost tool, fishing
OKI-CA OLUEGI-1X
16000 0
10
20
30
40
50 Time (Days)
60
70
80
90
100
Drilling performance comparison $30
Oluegi
Drilling & logging
$25
Oki-O S4 Avg.
$20
($M)
Cost
Oki-O S5
$15
Completions & testing $10
PANOCEAN
$5
SEPLAT
SAHARA
AMNI
ENERGIA
AVERAGE
PANOCEAN
SEPLAT
SAHARA
AMNI
ENERGIA
AVERAGE
$0 0
20
40
60
Time (days)
80
100
120
140
Three well drilling program • • • • • • • • •
Two Oki-OS appraisal wells tested contacts Oluegi exploration well tested new fault block Appraisals logged 211 & 298’ net pay in 12 & 19 sands Discovery logged 100’ net pay in 4 sands Appraisals discovered seven new pays absent down-dip DSTs flowed 3129, 2397 & 1600 bopd Doubled certified, bankable field reserves Three wells drilled from eco-friendly common location Minimal footprint saves time, money, rig move
Sahara’s first oil test
Oki-OS DSTs Oki-Oziengbe S4
A3
C1
Oki-Oziengbe S1
C2
C3
Program highlights • First seismic operated onshore • First operated wells • First onshore wells • First appraisal wells • First discovery well • First operated multi-well drilling program
• First production tests >7000 bopd • First production (coming soon!)….
Sahara’s first Christmas tree
Where we are ! (cont.)
Laying flow lines
2014 PLANNED ACTIVITIES
Welding flow lines
2014 PLANNED ACTIVITIES
Flow lines to flow station
Flow lines to manifold
Manifold extension
2014 PLANNED ACTIVITIES
Manifold base excavation
2014 PLANNED ACTIVITIES
FL-FS manifold tie-in
2014 PLANNED ACTIVITIES
Flow station tank farm
First production pathway Well Head XMAS TREE
manifold
DEGASER
METERS
SEPARATOR STOCK TANK
FLOWLINE
MANIFOLD
TEST SEPARATOR
RESERVOIR WASTE PIT
00000
00000
HSSE highlights Achieved > 1,000,000 LTI-free man-hours in seismic operations Marine setting with 1800 men & 150 boats in daily use
Achieved 631,928 LTI-free man-hours in Oki drilling campaign Instituted 50,000 man-hour safety alert for each well
Promoted staff safety incentive program Security & community incident-free operations
Developing new production security protocols
Community initiatives • “Sight for All” Program cataract eye surgeries • Cleft palate & benign jaw tumor surgeries • Bungalow construction for community workers • Jetty Refurbishment, Ajoki and Koko Communities • Road rehabilitation, Ajoki Community
• Local employment & contract labor slots • Contractor provisions
Sight for All Eye tests, drugs, eye glasses & cataract surgery in Ajoki and Ajamogha communities. Visual exams, tests, medical interventions & surgeries at the University of Benin Teaching Hospital, Benin City
Cleft lip & benign jaw tumor surgery Cleft Lip & Benign Jaw surgeries performed for 21 people at University of Benin Teaching Hospital
Bungalow construction Construction of accommodations in Ajoki and Ajamimogha communities for secondary school & health center
First production & growth • Infrastructure in place to begin production • Drilled 3 wells, installed 4 FLs to Oziengbe S FS • Forecast 4KBD est. initial production from Oki-OS 4
• Double to 8 KBD in 2015 once Oki-OS 5 completed • Facility, current existing production constrain rate • New FS & PL capacity expansion to grow production • 2016-17 FDP adds 6 new horizontals, one reentry • Oluegi development options via Oki or EPF adds more • New OML 274 drilling tied to new spare capacity adds
Production growth outlook 25
OKOS C6 A7 Dev Total Oil
Oil Rate (kbpd)
20
OKOS B2 H
OKOS C4 H Oil
15
OKOS A5 H Oil
OKOS A1 H Oil
10 Batch drilling OKOS 1 C1 STR Oil
5
OKOS A3H Oil
OKOS 5 Oil
OKOS 4 Oil
0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
OPL 274 outlook • Appraise swamp assets 2015-6 – Tsekelewu drill 1+ wells
– Pologbene drill 1+ wells
• Explore & appraise land assets 2016-7 – Oluegi field – Scotta – Gilli Gilli
New swamp drilling campaign • • • • • • • •
2 well drilling campaign Tsekelewu development well Surveying contracted, underway Dredging contract in negotiation Swamp rig negotiation ongoing Surveying underway Evacuation route planning Pologbene appraisal well planning
Upstream outlook • Oil flow commissioning 2H14 • OML conversion & 1st production 2H14 • Swamp drilling campaign 1Q15 • Offshore OPL 284-6 drilling campaign 2H16-17* • Offshore seismic reprocessing 1H15*
• Ghana 3D seismic shoot 1H15* • Ivory Coast seismic 2014-15 & drilling 2015-16 * Farmin opportunity available
Our success serves the nation
We thank you for your support! • To the DPR, NNPC, NAPIMS & NPDC • Our bankers Diamond Bank • Host communities Ajoki, Ajamogha & Koko
• Our contractors IDSL, SLB, BHI, HPEB/TNL • Lagos Oil Club
Thank you! Curtis Cohen Chief Operating Officer Sahara Group, Upstream +234-705-899-1727
[email protected]