Apache, Total make 'significant' oil, gas find offshore Suriname

Houston — Apache and France's Total said Tuesday they have struck what they call a "significant" oil and gas discovery offshore Suriname, the first sizable find in that country after several years of closely watched industry drilling.

The Maka Central-1 well on Block 58 encountered 240 feet of oil pay and 164 feet of light oil and gas condensate pay at a water depth of about 3,280 feet, the partners said in a statement, adding that appraisal planning is underway.

Block 58 adjoins the Stabroek Block in neighboring Guyana, where an ExxonMobil-led consortium has made 15 discoveries in four-and-a-half years and last month became the first offshore producers of oil in that country from their Liza field.

As a result, the Block 58 partners and analysts are optimistic about the Maka discovery, which is on trend with the gusher of Stabroek finds.

The "substantial" Maka find "dispels concerns about (primarily) gas condensate finds ... based on results from the ExxonMobil [group's] Haimara well in Guyana which was drilled toward the edge of Block 58," Credit Suisse analyst Bill Featherston said in an investor note shortly after Apache's announcement.

DISCOVERY SEEN AS 'CLEARLY POSITIVE'

"We view the discovery as clearly positive ... given the multiple play types confirmed and the material oil pay encountered," Featherston added.

In Guyana, Liza is moving toward peak production around 120,000 b/d in the next several months. The ExxonMobil-led group, which includes Hess and China's CNOOC, are now in the midst of developing Liza Phase 2 which was sanctioned last year and has a startup date of mid-2022. Peak output is targeted at 220,000 b/d.

And a third development at Stabroek, to produce the Payara find, is in the planning stage for first oil in 2023.

Apache and Total, which are 50-50 partners in Block 58, said their next well will test the same-aged upper Cretaceous intervals in a separate and distinct stratigraphic feature.

The next well, named Sapakara West-1, will be spudded this week. It is roughly 12 miles (19 km) southeast of Maka Central-1.

Apache operates Block 58 although operatorship will be transferred to Total, which paired up with Apache only last month, after a third well is drilled.

Maka Central-1 originally tested two intervals, the shallower Campanian and a deeper one known as the Santonian. The Campanian contains 164 feet of net hydrocarbon-bearing pay bearing light oil and gas condensate with API gravities of 40-60 degrees.

The Santonian holds 240 feet of oil-bearing reservoir, with API oil gravities of 35-45 degrees.

"Recall the initial discovery well [Liza] on the Stabroek block in May 2015 indicated 275 feet" of pay, Evercore ISI analyst Stephen Richardson said in a Tuesday investor note.

Judging by that and other details provided by Apache and Total, Richardson said he assumes 300 million barrels of gross recoverable oil for the Maka Central find.

POTENTIAL FOR 'PROLIFIC' OIL WELLS

"The well proves a working hydrocarbon system in the first two play types within Block 58," Apache CEO John Christmann said. "Preliminary formation evaluation data indicates the potential for prolific oil wells."

In addition, "the size of the stratigraphic feature, as defined by 3-D seismic imaging, suggests a substantial resource," Christmann said.

Last month, Apache in an update to drilling Maka Central-1, said that the well would target a third, deeper interval, the Turonian, that it now says is geologically similar to oil discoveries offshore West Africa.

The partners say pressure in the lower Santonian are a "positive" sign for the Turonian, found at 20,670 feet, and 6,300 feet of water, add future drilling will test the interval.

The result is very encouraging and proves the extension of the prolific world-class Guyana Cretaceous oil play into Surinam waters," Kevin McLachlan, Total's senior vice president-exploration, said. "We are optimistic about the large remaining potential of the area still to be discovered and will test several other prospects on the same block."

Block 58 offers "significant" potential beyond Maka Central, Christmann said, adding the partners have identified at least seven distinct play types and more than 50 prospects within the play fairway.

"History suggests there will be multiple opportunities to revisit [Maka-1's role in Block 58's future development potential] as time progresses and additional data points are received," Richardson said.

--Starr Spencer, starr.spencer@spglobal.com

--Edited by Gary Gentile, newsdesk@spglobal.com