Petro-Victory Energy Corp. is pleased to announce the signing of a drilling and workover rig contract for its multi-well program, with mobilization and drilling of the first well of the 2022 program to commence in late Q2 2022.
- Company has signed an exclusive 8-month rig contract with Mapeen Engenharia e Manutenção for the provision of the MAPEEN-01 drilling rig;
- MAPEEN-01 is a 1000 horsepower rotary drilling rig with the use of top drive and is capable of drilling down to at least 1800m;
- MAPEEN-01 rig provides Petro-Victory with required flexibility as the rig can be configured for both drilling and workovers;
- Contract includes a flexible day-rate depending on rig use for drilling or workovers, significantly improving cost and operational flexibility;
- Initial 8-month contract period to commence on mobilization of the MAPEEN-01 rig to the first well location (PVE-01); and
- Rig will be used for drilling and testing of 4 new wells at the Andorinha field before executing a workover program on the Trapia and São João fields.
The Company has concluded its competitive tendering process and executed an agreement with Mapeen Engenharia e Manutenção for the provision of the MAPEEN-01 rig to execute its multi-well development well and workover program in 2022 with rig mobilization expected in early H2 2022 for an 8-month period.
To maximize efficiency of the drilling campaign, Petro Victory will mobilize a smaller rig to location in May 2022 to batch drill and case the top-hole sections of the 4 wells at Andorinha. Executing the program in this manner will lower the well costs and significantly improve the expected timelines for delivery of the wells.
The MAPEEN-01 will initially be used for drilling and testing of four new wells at Andorinha: PVE-01, PVE-02, PVE-03 (all locations environmentally permitted) and GALP-06 (subject to environmental permit). Together, these wells account for proved plus probable reserves of 485,000 barrels of oil and US$16 million in NPV10 value, according to the Company’s December 31, 2020 reserve report, produced by GLJ. Each well is estimated to take between 25-30 days to drill at an estimated cost of US$600,000 and leverage existing production facilities on the Andorinha field. Given the recent rise in commodity prices, Petro Victory’s crude trading in the domestic market benchmarked to Brent and the attractive fiscal terms for onshore Brazilian production, the Company expects payout on these wells within 60 days.
Following the execution of the four well program at Andorinha, the MAPEEN-01 will then carry out a program of workovers at Trapia and São João. During workover operations a lower rig rate will apply, providing greater operational flexibility, significantly lowering the cost of the program and improving the economics of the individual workovers.
Richard Gonzalez, Petro-Victory CEO commented:
“The signing of the Mapeen Engenharia e Manutenção rig contract is a significant step in Petro-Victory’s operational plan to deliver its fully funded multi-well program this year.
We are excited to be entering an operationally intensive period to drive significant shareholder value by bringing on additional production from low-cost and low risk drilling locations across our portfolio.”