Capricorn plugged and abandoned dry the Alom 1SON directional stratigraphic new-field wildcat (NFW) in the CNH-R02-L01-A9.CS/2017 PSC contract, Area 9 block during late-October 2019. Parent company Cairn issued a press release on 28 October 2019 indicating the targeted Pleistocene sandstones were 500 m thick but water bearing.    The well reached a final total      depth (TD) of 2,056 m.     The NFW was spudded on 17      September 2019.  The well had an estimated proposed      total depth of 2,629 m measured depth (MD) and 2,332 m true vertical depth      (TVD).  It was targeting stacked, DHI      supported Pleistocene sandstones starting at 1,550 m.   The well was drilled by the      âMaersk Developerâ S/S in a water depth of 115 m.   The unrisked prospective      resources now reported for the Alom prospect is 140 MMboe.  The drilling cost of the Alom      1SON is estimated to be USD 36 million and the completion cost estimated      to be USD 4 million.   The CNH granted a drilling      permit to Capricorn for the Alom 1SON well on 17 September 2019.  Capricorn is operator of the      contract and has 50% working interest, Citla has 35% working interest, and      ENI holds 15% working interest pending formal governmental approvals for      its farm-in.   On 10 September 2019, Cairn reported with its 1st half 2019 results that it swapped 15% working interest with ENI with ENI entering the CNH-R02-L01-A9.CS/2017 contract operated by Cairn subsidiary Capricorn, and Cairn acquiring a 15% working interest in the ENI operated CNH-R02-L01-A10.CS/2017 contract. Capricorn Energy is operator of the CNH-R02-L01-A9.CS/2017 contract and held 65% working interest and Citla Energy has 35% working interest. Cairn reported it now has 50% working interest, Citla has 35% working interest, and ENI holds 15% working interest. In the ENI operated CNH-R02-L01-A10.CS/2017 contract, ENI held 80% working interest and Lukoil had a 20% working interest. ENI now holds a 65% working interest, Lukoil 20% working interest, and Capricorn holds 15%.The deal is pending formal approvals.  On 16 May 2019, the CNH approved a modified exploration plan for the Capricorn operated CNH-R02-L01-A9.CS/2017 PSC contract, Area 9 block involving only changes to the drilling schedule of prospects and a change in the proposed budget. From its November 2018 approved exploration plan Capricorn had planned to drill the Bitol-Kukulkan prospect first and the Alom prospect second. This has been changed to drilling the Alom prospect first and the Bitol-Kukulkan prospect second. The second modification in the exploration plan is an increase in the well drilling budget.The total budget approved for the exploration plan is USD 125.85 million.The estimated drilling expenditures for the two commitment wells increased from USD 105.21 million to USD 113.20 million. The Alom prospect is to be drilled first and has an estimated proposed total depth of 3,000 m in a water depth of 140 m.It is targeting stacked, DHI supported Pliocene sandstones starting at 1,550 m.The prospective resources now reported for the Alom prospect is 103 MMboe.The overlapping Bitol and Kukulkan prospects have been merged into one prospect, Bitol-Kukulkan, as reported by the CNH.The NFW will be drilled directionally to an estimated proposed total depth of 5,300 m in a water depth of 180 m.It is targeting stacked Pleistocene, Pliocene, and Upper and Lower Miocene sandstones from 765 m to 3,980 m.The prospective resources now reported for the Bitol-Kukulkan prospect is 261 MMboe. Parent company Cairn contracted the âMaersk Developerâ S/S to drill its commitment wells commencing in 3rd quarter 2019.   On 12 March 2019, Capricorn published a presentation updating its plans to drill two new-field wildcats (NFW) in its operated CNH-R02-L01-A9.CS/2017 PSC contract, Area 9 block during 3rd and 4th quarter 2019.The partners have five scenarios of prospects to drill with the primary prospect now reported to be Alom and Bitol. The operator reported in mid-March 2019 that the Alom prospect, located in the south-eastern corner of the block has 140 MMboe in prospective resources and is targeting a DHI supported Pleistocene stacked reservoirs.The proposed total depth (PTD) for the Alom 1EXP is 3,000 m in an approximate water depth of 140 m. The Bitol 1EXP is a directional new-field wildcat (NFW) prospect located in the south-western area of the block and has a PTD of 5,300 m.The well will target the Miocene in an approximate water depth of 180 m and has 180 MMboe estimated prospective resources  On 27 November 2018, the CNH approved the first budget and exploration plan for the Capricorn operated CNH-R02-L01-A9.CS/2017 PSC contract, Area 9 block from the CNH-R02-L01/2016 Bid Round.The approved exploration plan includes geological and geophysical studies and plans for two firm commitment exploration wells to be drilled in 2019. The total budget approved for the exploration plan is USD 123.18 million.The estimated two commitments well cost is USD 68.18 million.The total work unit commitments proposed is 66,960 work units, above the minimum of 61,100 work units committed to.   On 25 September 2017, the CNH signed the final award contract with the consortium of Capricorn Energy Ltd (Cairn), and Citla Energy E&P S.A.P.I. de C.V. for the CNH-R02-L01-A9.CS/2017 PSC contract, Area 9 block from the CNH-R02-L01/2016 Bid Round.On 19 June 2017, the consortium of Capricorn Energy Ltd (Cairn), and Citla Energy E&P S.A.P.I. de C.V. was the high bidder in the CNH-R02-L01/2016 Bid Round for the Area 9 block in the Sureste Basin and was granted a preliminary award.There was a tie in the bidding for the block between ENI and the consortium of Capricorn and Citla each bidding the maximum of 75% state participation and a 1.5 work unit factor.The Capricorn consortium won the tie-break with a bonus offer of USD 30,003,333.33 versus the ENI offered bonus of USD 20,470,500.00.  The consortium offered 54.9% additional state take participation above the minimum 20.10% for a maximum total state take participation of 75.00%.The minimum work commitments were 2,500 units equivalent to USD 2,500,000 at an oil price between USD 45 to USD 50/bbl.The consortium offered an additional work unit factor of 1.5 equivalent to two wells with a value established by the CNH in the bid documents of 29,300 or USD 29.3 million at an oil price between USD 45 to USD 50/bbl. The total work commitment therefore is estimated to be USD 61.1 million plus the bonus payment of USD 30.0 million is a total financial commitment of USD 91.1 million.There were five other bids for the block.The 3rd highest bidder was the consortium of Chevron, PEMEX, and Inpex who bid total state take of 70.45% and a 1.5 unit work factor.  The general PSC contract terms include a 1st exploration period of four years with the possibility of a two-year extension.Relinquishment of the entire contract area is required if there is no evaluation or development plan filed for any discoveries.There is the possibility of a 2nd exploration period of two years with 50% relinquishment if committing to one exploration well and 0% relinquishment if committing to two exploration wells in the extension period.If a discovery is made there is an evaluation period of two years.The development phase is for approximately 22 years from the date of an approved development plan with two possible five-year extension periods.The maximum contract term is 40 years.Local content during the exploration period is 15%, 17% for the evaluation period, and 26% during the first year of the development period until 2025 when it increases to 35%.A variety of taxes and fees apply to the PSC contract.There is a maximum 60% cost recovery with an adjustment mechanism.
Mexico (Rio Grande Embayment (Gulf Coast B.)) General