(Premier Oil, 6.Aug.2018) — London-based Premier Oil is focused on development of assets in parts of the world from South East Asia, the North Falklands Basin, as well as Mexico and the world-class oil discovery at Zama.
What follows is a backgrounder on Premier in Mexico:
In July 2015, Premier successfully entered Mexico with the award of Blocks 2 and 7 in Mexico’s Round 1 licence round. The blocks are located in the shallow water Sureste Basin in the Gulf of Mexico, one of the world’s most prolific hydrocarbon provinces and the most important in Mexico’s history, having produced nearly 50,000 mmboe to date. The award of Blocks 2 and 7 represented the first time in 75 years that Mexico’s upstream sector has been open to private investment. Subsequent licensing rounds have taken place and in March 2018, Premier was awarded three further blocks, Block 30 in the Sureste basin and Blocks 11 and 13 in the Burgos basin, in Mexico’s Round 3.1 licence round.
Sureste Basin
Block 2 (10% non-operated interest); Block 7 (25% non-operated interest); Block 30 (30% non-operated interest)
Premier was originally awarded a non-operated 10% interest in Blocks 2 and 7 at no upfront cost, in partnership with Talos Energy (operator) and Sierra Oil and Gas. Large parts of the Sureste basin remain under-explored, particularly in comparison to the US Gulf of Mexico. One such area is the Salinas sub-basin where Blocks 2 and 7 are located and where light oil will be targeted in Tertiary clastic reservoirs.
In 2016, Premier and its joint venture partners reprocessed the existing 3D seismic data and matured a number of prospects across its Blocks 2 and 7 as candidates to be drilled in 2017 and 2018. Premier elected to exercise its option to increase its equity interest in Block 7 to 25% in December 2016.
In 2017 Premier drilled its first exploration well offshore Mexico. The well drilled the Zama prospect in Block 7 and resulted in a world class oil discovery. Initial estimates of the gross oil-in place volumes for the overall Zama structure are 1.2-1.8 billion barrels with a gross oil bearing interval in the Zama-1 well of over 335 metres (1,100 feet). Estimated recoverable P90-P10 gross unrisked resources are in the range of 400-800 mmbbls including the volumes that extend into the neighbouring block operated by PEMEX. Premier is now working with its joint venture partners and PEMEX to move forward with the appraisal and development of this world class discovery, and in April 2018 an appraisal programme for was submitted to the Government authorities. The joint venture partnership has selected the Ensco 8503 rig and the first appraisal well is expected to spud in Q4 2018.
https://media.investis.com/p/premier-oil/Premier%20Oil%20-%20Mexico%20Video%202017.mp4
Premier also currently holds a carried 10 per cent interest in Block 2, with an option to increase to 25 per cent or to exit. The joint venture is evaluating which prospect will be the first to be drilled, targeting a well in 2019.
Block 30 which Premier and its joint venture partners DEA (operator) and Sapura Energy were awarded in March 2018, is located directly to the south west of Premier’s Zama discovery. Premier has identified numerous material leads and prospects in the Tertiary clastic plays, typical of the Sureste basin. 3D seismic will be acquired in 2019 ahead of firming up drilling locations for 2020.
Burgos Basin
Blocks 11 and 13 (100% operated interests)
Premier was awarded 100 per cent operated interests in Blocks 11 and 13 in March 2018. It leveraged its growing understanding of the Mexican shelf to gain early access to the highly prospective Burgos basin inboard of the prolific deep water Peridido fold belt. Several structures have been identified in analogous plays to those proven in the onshore Burgos basin and offshore the US Gulf of Mexico. The exploration targets are Pliocene to Miocene in age and the initial work programme includes reprocessing existing 3D seismic.
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