Apache’s Block 58 offers most promise for Suriname resource – Morgan Stanley

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US multinational investment bank and financial services company Morgan Stanley says despite a wave of lease awards beginning in 2010, no commercial oil resource had been discovered in offshore Suriname prior to Maka Central-1, Apache’s first exploration well on Block 58. Now, with the success of three discoveries, the last of which is seen as a major find, Apache’s operations on the block offers the most promise for Suriname offshore resource.

In recent years, Kosmos, Apache, Tullow, Petronas, and Inpex have all drilled within their respective blocks. Kosmos provided the most recent of these results in 2018, unsuccessfully drilling the Anapai-1A well in Block 45 and the Pontoenoe-1 well in Block 42. Apache drilled two unsuccessful wells in Block 53, Popokai-1 and Kolibrie-1 in 2015 and 2017, respectively.

In a research paper seen by OilNOW, Morgan Stanley said despite the lack of prior success in Suriname, more advanced technology, including better seismic subsurface imaging, could improve the odds of extending Apache’s recent exploration success.

The bank said in the case of ExxonMobil’s discoveries in Guyana, the resource was de-risked for multiple years thereafter across the Stabroek Block – leading to steady increases in the resource estimate.

“Apache is at the beginning of this process, and we expect results from the company’s fourth exploration well, Keskesi East-1, sometime this fall,” Morgan Stanley said.

Beyond upcoming exploration, the bank said it expects the Block 58 JV will begin to supplement exploration with appraisals to quantify the resource, potentially a multi-year catalyst path. In May, Apache had submitted plans for the Maka appraisal program to the Surinamese government, which has a 60-day review and comment period. Apache and JV partner Total then have 2 years to execute the plan. Apache also expects to submit plans for the Sapakara appraisal program in the coming weeks.

“Over time, as Apache more fully transitions from exploration to appraisal and development, incremental capital needs should be minimal. While the JV burdens Apache with 50% of exploration capex, the company’s share of appraisal and development capex is just 12.5% of the first $10 B in spend,” Morgan Stanley pointed out.

On Wednesday, Apache announced its third discovery offshore Suriname at the Kwaskwasi-1 prospect, drilled using the Noble Sam Croft.

The well was drilled to a depth of approximately 6,645 meters (21,800 feet) and successfully tested for the presence of hydrocarbons in multiple stacked targets in the upper Cretaceous-aged Campanian and Santonian intervals.

Preliminary fluid samples and test results indicate at least 278 meters (912 feet) of net oil and volatile oil / gas condensate pay in two intervals. The shallower Campanian interval contains 63 meters (207 feet) of net oil pay and 86 meters (282 feet) of net volatile oil / gas condensate pay. Based on samples taken, the API oil gravities are between 34 and 43 degrees. The deeper Santonian interval contains 129 meters (423 feet) of net hydrocarbon reservoir.

Apache said the team is still collecting data on API oil gravities in the Santonian.

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