AWE Ltd has recently announced that the total booked reserves and contingent resources for the Sugarloaf area of mutual interest (AMI) have increased. The Sugarloaf AMI is located in the Eagle Ford Shale and Austin Chalk unconventional plays in Texas.
There are several leases within the AMI, which total approximately 24 000 acres, whilst AWE holds a 10% working interest of approximately 2400 net acres.
This upgrade followed an independent appraisal and report, prepared by DeGolyer and MacNaughton, on the Lower Eagle Ford shale and Austin Chalk zones and AWE’s initial assessment of the contingent resource for the Upper Eagle Ford zone.
Excellent production performance and significant upgrades
According to the Managing Director of AWE, Bruce Clement, Sugarloaf continues to be a well-managed growth asset that has delivered excellent production performance and significant upgrades to AWE’s reserves and resources throughout its development.
“This increase in 2P Reserves of 19.3 million boe represents an increase of 24% in total 2P Reserves for AWE to over 100 million boe at 31 December 2014. It also represents close to four years of current production for the Company based on 2014-15 production guidance of 4.6 to 5.1 million boe”.
Substantial savings in development well costs
“For the nine month period to 31 March 2015, production from the Sugarloaf AMI was up 49% over the prior year comparable period, and the operator, Marathon Oil Corporation, also achieved substantial savings in development well costs over the same period. At the end of March 2015, 205 wells were in production in the AMI, with a further 40 wells being drilled or awaiting completion”.
Attractive investment opportunities
“Our Sugarloaf asset lies within the sweet spot of acreage in the Eagle Ford Shale and Austin Chalk plays, and wells currently being drilled in the AMI continue to provide attractive investment opportunities, even at current lower oil prices. Marathon continues to actively pursue further cost saving initiatives as well as targeting more efficient development through pad drilling and completion design”, Mr. Clement said.
Adapted from press release by David Bizley