Africa-focused energy and Nigerian company RoyalGate Energy announced that it will drill a new well in Equatorial Guinea’s Block Z in the first quarter of 2016.
The company plans to drill the Z-1 well close to the location of previous offset wells and in the vicinity of known producers. Located to the north of Bioko Island and south of the Marathon Oil-operated Alba field, Block Z has estimated gas reserves of more than 3.6 trillion cubic feet. The company entered the block as operator in 2013.
RoyalGate Energy President Frank Ene commented in a statement, “We are proud to announce the drilling program for the Z-1 well. This is the continuation of what we see as a long term partnership with Equatorial Guinea and we see a lot of development potential for Block Z. We are bullish about the prospectivity of this block and our other assets in Equatorial Guinea.”
The company is also working with Xuan Energy and GEPetrol to explore Equatorial Guinea’s Block Y. The Okume field, which began production in 2006, is located at the southwestern boundary of the block and the Ceiba field, which has been producing since 2000, is located slightly further southwest. These fields have historically been two of Equatorial Guinea’s most prolific.
The latest development follows a statement from IMF (International Monetary Fund) staff economists on September 15, 2015 that Equatorial Guinea’s decade-long hydrocarbon boom is ending and the country’s oil and gas extraction has plateaued.
Economists at the organization also predicted that Equatorial Guinea’s oil dependent economy will contract through 2020, under pressure from low oil prices and falling hydrocarbon production.