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Kosmos eyes half dozen wells by end of this year

Equatorial Guinea, US Gulf, Senegal and Mauritania on menu for major drilling drive

London-listed Kosmos Energy is set to drill six nearfield exploration and appraisal wells by the end of the year in Equatorial Guinea, the US Gulf of Mexico, Senegal and Mauritania.

The Equatorial Guinea and US campaigns will target prospects near infrastructure that could house resources of 300 million barrels of oil equivalent or more and, if commercial, would be fast-track, low-cost, high-margin projects.

At the other end of the scale, an appraisal well off Senegal aims to delineate the huge Yakaar gas discovery, while a Mauritanian probe aims to find additional gas resources close to the equally large BirAllah gas find.

If these BP-operated probes are successful, they could support two new liquefied natural gas projects.

The S-5 probe in Block S off Equatorial Guinea is set to spud next month and, if successful, could be tied back to Kosmos’ Ceiba floating production, storage and offloading vessel.

Targeting 50 million boe of potential oil and gas resources, the well will appraise the G-13 oil discovery located in 1000 metres of water 20 kilo­metres south-west of Ceiba.

Chief executive Andy Inglis said in Kosmos' second quarter conference call that analysis of recently acquired seismic data has given a better understanding of G-13's geology and boosted its resource potential beyond the original 25 million boe.

Fresh seismic “has given a much clearer image of the depositional system that delivered reservoir sand into the prospect area (which) has enhanced our understanding of the trap model", he said.

“The new information has been key in identifying that previous wells were drilled on what we now believe to be the edge of the main reservoir channel, providing considerable upside,” he explained.

“This, together with the stratigraphic element, increases the resource potential to around 200 million boe gross for the field,” said Inglis, saying S-5 will test around 50 million boe of potential resource.

He said the economic cut-off for S-5 to be a viable project is around 50 million boe “based on all pre-front-end engineering and design work we have done.” If S-5 is successful, follow-up potential also exists.

In the US Gulf, Kosmos will spud the Moneypenny and Resolution probes in October followed by Oldfield in November.

Moneypenny is a 17-million boe target close to the West Delta hub, while Resolution could house 100 million to 200 million boe of resource and is near the Gunnison spar.

Inglis added that the “Resolution area prospectivity is up to 500 million boe".

Oldfield potentially holds at least 30 million boe and is situated in close proximity to the Devil’s Tower spar.

“On Oldfield, we're in the process of finalising cross assignment of our interest with Hess on an adjacent block, with Kosmos taking a 40% interest in the two blocks and Hess 60%," said Inglis. “As a result of new seismic data that Hess has processed in the area, we now believe that there could be significant upside to the 30 million boe we initially talked about.”

In Senegal, an appraisal probe is due to spud next month on Yakaar, which, together with the nearby Teranga find, holds between 10 trillion and 25 trillion cubic feet of in-place gas resource.

The Orca-1 probe — near BirAllah — is set to spud in October. BirAllah is currently estimated to hold 10 Tcf to 60 Tcf of gas in place.

Inglis said: “We believe we have enough gas to underpin three separate 10 million tonne per annum LNG hubs,” stressing that “the innovative (LNG) development scheme we’re using at Greater Tortue Ahmeyim can be replicated at BirAllah and Yakaar-Teranga using a design one, build many approach.”

Discussing Kosmos' plans to offload two-thirds of the 30% stakes it holds in Mauritanian and Senegalese assets, Inglis said “the sell-down process is progressing well”, with the resource base garnering “significant industry interest” and a transaction due to be announced by the end of the year.

“We’ve had interest from independent oil companies, national oil companies and trading houses. It's been interesting to see the diversity of the strategic interest in the assets. I think that... is the real driver,” he said.

Kosmos posted a $16.8 million profit in the second quarter compared to last year’s $103.3 million loss , as revenues rose from $215.5 million to $395.9 million.

The company also reported record production of 71,100 barrels of oil equivalent per day.

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