BW Energy Limited today announces adjustments to the development program on the operated Dussafu Marin license inGabon in response to the spread of the coronavirus (COVID-19) and restrictions on international travel. The deferral of investments also reflects increased market volatility and oil price uncertainty. Production activities inGabon remain uninterrupted asBW Energy complies with public health advisory at all its locations to ensure safe operations and contribute to stopping the spread of COVID-19. Deferring Dussafu investments The impact of international travel restrictions is limiting the Company's ability to move essential personnel, subcontractors and equipment to and fromGabon . This may affect the timing of the drilling of the planned DTM-7H well and the subsequent exploration well. The major contracts provide for certain termination rights under the current circumstances. The Company has for the same reason decided to not exercise the options for the two additional exploration wells under the existing rig contract. Further in response to recent commodity price volatility,BW Energy has decided to defer the Ruche Phase 1 development. The revised capital spending program for 2020 amounts to approximatelyUSD 125 million , of which aboutUSD 30 million was incurred as of the end of February. The revised program represents a 50% reduction to the Company's previously announced capital expenditure program of approximatelyUSD 250 million for 2020. "We are continuously evaluating our drilling program and the potential impact for the DTM-7H well and the planned exploration well", saidCarl K. Arnet , the CEOBW Energy . "We are also taking decisive action to reduce investments in light of current market volatility and uncertainty, which combined with company-wide cost saving initiatives will conserve liquidity." Total available liquidity as of endFebruary 2020 amounted toUSD 184.5 million in cash with no debt. In addition,BW Energy is continuing the process of finalising a reserve based lending (RBL) facility with a syndicate of leading banks. The RBL facility will have a six-year term, with an initial amount ofUSD 200 million plus an accordion ofUSD 100 million . Production stable at increased level Dussafu daily operations continue to perform in line with expectations with four wells (DTM-2H, DTM-3H, DTM-4H and DTM-5H) producing to the FPSO BW Adolo at a current rate of approximately 20,000 bbl/day oil production (gross). The DTM-6H well is nearing conclusion of its drilling and completion operations. This well is scheduled to be brought online by June. Total Dussafu production for 2020 is projected to be 16,000 - 18,500 bbls/day (gross) based on five producing wells, compared to 11,800 bbls/day on average in 2019, while OPEX per barrel is expected to decrease to approximatelyUSD 15 -17 per barrel, compared toUSD 21 per barrel on average for 2019. Leveraging flexible business model InBrazil ,BW Energy will continue to progress with regulatory and environmental approvals and pursue cost reducing initiatives for the Maromba project as the Company works toward project FID. "Our response to the present turmoil in the oil market shows the strength and flexibility of our business model. By quickly adapting to the situation and delaying investments until we have a better line of sight of an improved market, we preserve our firepower," saidCarl K. Arnet . "Our projected production, phased development approach with short cycle-time to first oil and full capex discretion enable us to sustain a prolonged period of low oil prices. When the markets improve, we can quickly bring our developments back in execution mode and onwards to production." For further information, please contact: Knut R. Sæthre, CFO BW Energy, +47 91 11 78 76 ir@bwenergy.no AboutBW Energy :BW Energy is a growth E&P company with a differentiated strategy targeting proven offshore oil and gas reservoirs through low risk phased developments. The Company has access to existing FPSOs to reduce time to first oil and cashflow with lower investments than traditional offshore developments. The main assets are 73.5% of the producing Dussafu Marine Permit offshoreGabon and a 95% interest in the Maromba field inBrazil , both operated by the Company. Total net 2P+2C reserves are 247 million barrels at the start of 2020 and gross average production from Dussafu was 11.8 kbopd in 2019. This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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