Q&A with Sonoro CEO Richard Wadsworth (Part 2 of 3)

October 10, 2017

A history of shallow success.

Proven regional experience.

A refinery less than 48 hours away by tanker.

For all these reasons and more, Sonoro Energy expects to capitalize on a low-risk proposition.

Drilling has begun on Sonoro Energy’s LG-1 Up-dip appraisal well in Indonesia—where the Budong Budong Production Sharing Contract (PSC) lease, according to an independent prospective resource report, has just under 80 million barrels-of-oil equivalent (BOE) in-place resources.

(The photo at right, taken Oct. 6, 2017, shows the LG-1 Up-dip wellsite in the Budong Budong PSC.)

The Sonoro Signal’s three-part Q&A with SNV Chief Executive Officer and Director Richard Wadsworth continues with Part 2, a discussion of geology, oil viscosity and local engagement in the province of West Sulawesi.

 

Q: What are the biggest risks in making this drilling program a success?

A: The key risk is reservoir quality and oil quality. The oil seeps in the region, and historical information, indicate light oil with over 30 API.

Based on outcrop assessment, regional geology, LG-1 well and mudlog information, and petrophysics, we believe that updip thickening of sands occur with better quality sands. There are indications that Eocene sands may be present in the Lisu sands, having been unroofed through tectonic activity and then re-deposited in the Pliocene-age Lisu formation, providing a better reservoir sand.

We can only determine this with a new appraisal well and core. Hence, the LG-1 Up-dip appraisal well being drilled right now.

 

Q: Are any further approvals needed from the Indonesian government to drill this well?

A: We require no further approvals for this exploration period appraisal well. Assuming a successful well and economic test rates, we would anticipate submitting an application for a PoP (Put well on Production), which we hope can be done relatively quickly. We would then then follow with placing the well on production, and potentially stepping out on a couple more step-out drilling wells to reach higher production and economies of scale. Potentially, we could then turn this all into a commercial plan of development under our 30-year license (in which we are currently in year No. 11).

This can also include performing additional wells and seismic analysis on other prospective structures—and, of course, developing the current LG structure discovered.

 

Q: What has your experience been, to date, working in the province of West Sulawesi with the local people and government?

A: Everyone has been very accommodating, professional and committed to hard work in order to make this a success.

The main industries in the area of this well are palm oil plantations and fishing, neither of which bring significant technology or skilled labor.

Oil development could be highly beneficial for the local and regional communities here. The island of Sulawesi trails well behind average GDP-per-capita figures in Indonesia. People here are eager for this work, with none of the malaise historically associated with higher oil prices, and are willing to take on new training, accept new challenges and work hard.

I recently had the opportunity to witness several of our new local employees working with the drilling team on setting up the drilling rig and services on site, and I was amazed at how quickly they adapted to this new working environment and how they jumped in on every opportunity to help, while also taking on our safety culture.

 

(Watch for Part 3 of the Starting Shallow, Thinking Big Q&A series—coming soon via the Sonoro Signal)