Sherritt's Cuba drilling disappoints

Tuesday, March 28, 2017

Sherritt International announced preliminary results for offshore exploration well LT-100 in Cuba's block 10, where the Canadian company has a production-sharing contract.

Reprocessing of existing 3D seismic data for block 10, located in the bay of Cárdenas, revealed a second Veloz formation, known as the Upper Veloz, said Sherritt, which drilled the CUPEY-1X well in 1994 that briefly tested 13.6° API oil at a rate of 3,750b/d.

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As a result of that previous drilling success, LT-100 was designed to target the Lower Veloz.

"LT-100 was drilled to a measured depth of 4,232m, of the 5,836m planned, but failed to reach the target Lower Veloz formation because of wellbore instability arising from unexpected geological complexities when a zone of the less stable Vega Alta rock formation repeated itself," the company said in a statement.

"This resulted in drilling problems and the lower section of the well had to be abandoned."

The company said it drilled a sidetrack well from the existing wellbore to better define the Upper Veloz, and good oil shows were encountered. However, the trajectory of the sidetrack was not high enough in the Upper Veloz structure. The sidetrack well was tested and produced oil but not at commercial rates, according to the statement.

"While this well was not successful at reaching its target of the Lower Veloz, nothing has changed concerning our view of block 10's potential," CEO David Pathe said.

"LT-100 has provided valuable data about the fold and thrust geology of the basin that we are currently using to update our geological models and drilling plans."

Sherritt's production guidance for 2017 of 11,500-12,500b/d of gross working interest is not impacted by the results of LT-100, it said.

The company said in February it had budgeted some US$50mn for oil and gas activities in Cuba this year, including US$25mn to complete a first well at block 10 and drill a second one on the acreage.