Further positive momentum at Zama

The Zama-2ST1 well (side-track well son Zama-2) encountered 873ft of gross oil bearing column with a net-to-gross ratio of c.70%. The well flowed at 7.9mboepd of which 94% was light 26-30 API oil. The well results indicated a prolific reservoir and potential to achieve significant plateau rates at the field. The operator estimates that a peak production of 150-175mboe/d is achievable.

This news is positive for the recoverable reserves of the field and could tighten the current estimates range of 400-800mmboe upwards.

The rig will now move to drill the Zama-3 well, the last in the 2019 campaign, and should confirm the extent of the field to the south. The drilling programme remains ahead of schedule with the Zama-2ST1 completed 9 days ahead of schedule and 16% below budget.

The Zama field is planned to be developed from a single drill centre with drilling from the platform. Three production platforms are envisaged, each with capacity of up to 100mbopd. Produced oil is planned to be transported via a pipeline to the Dos Bocas terminal located onshore, c.70km away from the field.

The Zama partners are: Talos (35% operator), DEA (40%) and Premier Oil (25%).

For Premier Oil, this development could overtake the Sea Lion development in the Falklands (another large resource optionality for the company), adding visibility to additional near-term production growth.

Premier Oil also has a non-operated interest in Block 30 which could see Mexico transform into another important leg of its portfolio.

Block 30 is operated by DEA 40% with partners Premier Oil 30% and Sapura Energy 30%.

See also Premier success at Zama on the Zama-2 result in January 2019.

Premier Oil Camarco RBC Capital Markets