Repsol boosts reserves 650 mil boe with six new discoveries in 2020

Barcelona — Spain's Repsol said Tuesday it added 650 million barrels of oil equivalent of estimated reserves after all six wells drilled in 2020 yielded positive results amid the start of a 26% planned spending reduction due to weaker prices.

"Although exploration activities have been significantly reduced, the six wells that Repsol has drilled so far this year — in Colombia, the United States, and Mexico — have all shown positive results. The estimated resources total 650 million barrels of oil equivalent," the company said in a regulatory filing.

Repsol had 2.1 billion boe of fully consolidated and equity accounted developed and undeveloped oil and gas reserves at the end of last year.

Repsol announced Monday that it made two significant offshore oil discoveries in Mexico's deep water with its Polok-1 and Chinwol-1 exploration wells in Block 29 in the Salina Basin, in which it is operator with a 30% stake.

Both wells in Mexico were drilled below their cost and time estimations, Repsol said.

Offshore Mexico

The company expects to spud its third deep water exploration well offshore Mexico, located in Block 10 offshore Veracruz, in the next few days using the same Maersk Deep Water Valiant drillship.

The latest results follows the company's success with the Lorito Este-1 exploration well in Colombia and previously positive results at the Monument discovery in the Gulf of Mexico and two discoveries in Alaska.

The Americas region has been Repsol's most resilient in terms of production.

Upstream production from the region jumped 30% year on year to 63,000 boe/d in the first quarter, primarily due to the acquisition of an additional 63% of working interest in Eagle Ford (US), the connection of new wells in Marcellus (US) and the first oil in Buckskin (US) in June 2019.

This helped offset a production decline of 10% to 62,000 boe/d in the Europe and Africa region, which includes Libya, where output has suffered interruptions following a shutdown at a field in January and force majeure for Libyan crude loadings throughout the first quarter, as well as declines of 6% in Latin America to 94,000 boe/d and 5% in Asia, Russia and Rest of World to 26,000 boe/d.

In the downstream segment, the impact of falling energy price declines meant Repsol had to reduce the value of its inventories by Eur790 million in the first quarter, which contributed to a bottom line net loss of Eur487 million in the period.

The company's realized price for oil was $44.10/b, down 22% year on year while its realized gas price was down 29% to $2.40 per 1,000 scf.

As a means to shore up finances in the short term, Repsol has successfully issued Eur1.5 billion in new debt and boosted its credit lines, it said.

Repsol confirmed a short term resilience plan which sees an average price of Brent crude of $35/b for the period April to December and a Henry Hub gas price of $1.8/Mbtu and means reductions of more than Eur350 million in opex and more than Eur1 billion in capex, along with optimizations of around Eur800 million in working capital, the company said..