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- Byron Energy (BYE) continues to maintain production from the G3 and G5 wells in its offshore South Marsh Island 58 (SM58) project in the Gulf of Mexico
- The company says both wells are being monitored since being brought to production over the past month, and adjustments will be made to optimise flow rates
- Bringing the wells online has lifted the company’s total net production to greater than 3000 barrels of oil equivalent per day
- However, Byron says capital expenditure for the drilling program landed above expectations and now stands at US$35.1 million (A$50.46 million)
- Shares in Byron Energy are trading 3.7 per cent higher today at 14 cents per share at 1:15 pm AEST
Byron Energy (BYE) has continued to maintain production from the G3 and G5 wells in its offshore South Marsh Island 58 (SM58) project in the Gulf of Mexico.
The company said both wells were being monitored and adjustments would be made to optimise flow rates after they were each brought to production over the past month.
The G3 well commenced production on August 1 and, despite continuing to unload completion fluids, is now producing at a managed rate of 500 barrels of oil per day and 1.1 million cubic feet of gas per day.
Meanwhile, Byron brought the G5 well to production on July 13, and this well is currently flowing at a managed rate of 280 barrels of oil per day and 215,000 cubic feet of gas per day.
Bringing the wells online has lifted the company’s total net production to greater than 3000 barrels of oil equivalent per day.
However, the company said capital expenditure for the drilling program landed above expectations and now stood at roughly US$35.1 million (A$50.46 million).
The company was originally estimating to spend US$21.6 million but faced a number of unplanned expenses to fix operational issues.
Still, Byron CEO Maynard Smith said the early production from the wells was encouraging, though it was too early to make a meaningful assessment of the G3 and G5 long-term rates.
“It is worth keeping in mind that the G3 and G5 wells have added to our understanding of the SM58 project and will ultimately be reflected in our upcoming reserves report,” Mr Smith said.
“Regarding the cost overruns, a large portion was related to adding extra sand-controlled completions in both wells,” he explained.
“We felt it was important to be able to change zones in the future without the use of a drilling rig in the time of a tight rig market.”
He said the cost overruns equated to roughly two months of projected revenue, and this SM58 program would be fully paid for by the end of the year.
Mr Smith said net daily production from the SM58 G platform now exceeded the SM71 F platform.
Shares in Byron Energy were trading 3.7 per cent higher today at 14 cents per share at 1:15 pm AEST.
