San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, notes the announcement made today by Decklar Resources Inc. (“Decklar Resources”) in Canada.
San Leon has entered into a conditional subscription agreement with Decklar Petroleum Limited (“Decklar Petroleum”), the local subsidiary of Decklar Resources, which entitles San Leon to purchase US$7,500,000 of 10% unsecured subordinated loan notes of Decklar Petroleum and 15% of the enlarged share capital of Decklar Petroleum.
In addition, Decklar Petroleum and San Leon have entered into an option agreement which, at San Leon’s sole discretion, entitles San Leon to purchase an additional US$7,500,000 of loan notes and further Decklar Petroleum shares representing an additional 15% of the enlarged share capital of Decklar Petroleum. Further details of these conditional investment agreements can be found in the Company’s announcement of 1 September 2020. This transaction is still awaiting final conditions precedents to complete.
Part of the text of Decklar Resources’ announcement is set out below:
“Oza-1 Well Re-Entry and Testing Update
· The initial flow testing of the L2.6 sand resulted in a stabilized flow rate of 2,463 barrels of oil per day (“bopd”).
· Testing of the individual sands identified on well logs will continue for the two remaining target zones, after which the well is expected to be put on commercial production with a dual-tubing string completion.
Calgary, Alberta — Decklar Resources Inc. (DKL-TSX Venture) (the “Company” or “Decklar”) is pleased to announce the following update on the Oza-1 well re-entry at the Oza Oil Field in Nigeria, being performed by the Company’s wholly owned Nigeria-based subsidiary, Decklar Petroleum Limited.
The Oza-1 well has been re-entered successfully with the old tubing and completion equipment successfully being removed, all well maintenance performed, the deeper zones cemented off to isolate them from the target reservoirs, a new wellhead installed, and the site prepared and production testing equipment installed for and re-completion of the target zones in the Oza-1 well.
During the initial flow testing of the L2.6 sand, the zone produced at multiple choke settings ranging from 16/64 inch to 32/64 inch over the 116 hour testing period. The L2.6 sand is the deepest target zone of the re-entry program on the Oza-1 well and has 21 feet of gross hydrocarbon pay thickness. The testing of the L2.6 sand yielded a stabilized flow rate of 2,463 barrels of oil per day ( ” bopd”) of 22 degree API sweet crude oil on a 32/40 inch choke setting and flowing tubing head pressure of 450 psig during the last three hour period of the 22.5 hour flow test at this choke setting. In all tests there was less than 0.05% basic sediment and water ( ” BS&W”) and no gas production.
The foregoing test results should be considered as preliminary. Readers are cautioned that the test results herein are not necessarily indicative of long-term performance or of ultimate recovery.
The perforation and testing of the two other target zones is on-going and expected to conclude in the coming weeks. The Oza-1 well is expected to then be completed using a dual-tubing completion string to produce from the best two zones being tested and put on commercial production. The Oza Oil Field has significant export and production capacity through processing facilities and infrastructure already in place and operational, which is anticipated to allow for the immediate export and sale of crude oil from the Oza-1 well.”
San Leon Energy plc
+353 1291 6292
Oisin Fanning, Chief Executive
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