Trillion Energy International Inc. is please to provide an update on the Company’s planned activities for 2021.
We expect oil and gas prices to continue to rebound during 2021 as the economy strengthens. 2020 was a challenging year for the oil and gas sector, with historic negative oil prices due to a sharp drop in demand as a result of COVID and temporary over-supply concerns abounded. Oil prices have now returned to pre-COVID levels, the current price of oil received is over US $50/bbl, a $20/bbl improvement. Natural gas currently sells for US $5.52/mcf.
Our two producing oil and gas fields continue to generate revenue. The Cendere Oil Field is producing 150 bopd and generating about US $230,000/month for Trillion and the SASB Gas Field is producing 705 mcf/d and generating about US $38,000/month for Trillion.
Our mandate for 2021 is to commence redevelopment of the SASB Gas field which was delayed from 2020 due to the associated slowdowns, COVID and energy markets conditions, which have only recently recovered.
As part of the SASB Gas field Phase III work program, we plan to drill five new wells and conduct two or more workovers, which target proven and probable gas reserves having a discounted Net Present Value to the Company after all costs, of US $79.5million as evaluated by GLJ Petroleum Consultants, as previously reported in our June 23, 2020 and June 30, 2020 news releases. The Phase III work program will be followed by Phase IV and Phase V work programs to produce additional gas.
We are currently in discussions with drilling and services companies to carry out the Phase III development work program. Several jack-up rigs are available in the region and the Company is in the process of securing a timetable for work commencement. A jack-up rig is required as the SASB gas field is located in shallow water. The Company is plans to fund the work through a combination of debt and equity capital to which it is currently evaluating opportunities to acquire same.
Art Halleran, CEO stated: “2021 will be a milestone year for us, we believe the redevelopment of the SASB gas field will significantly grow our shareholder value. Upon the successful completion of the Phase III development, we expect to generate significant positive EBITA and cash-flow that will be used to fund a Phase IV development program for SASB planned for 2022”