Trillion Energy International Inc (CSE:TCF) (OTCMKTS:TCFF) said Tuesday it expects to receive next month an independent report on its prospective gas resources on the SASB gas field in the Black Sea.
In addition, the company said it has completed its preliminary cost estimates and timelines associated with developing the reserves on SASB, in which it owns a 49% stake.
Trillion said its focus on the re-development of SASB is to prioritize development based on the economics of each of the four gas fields, such as cost, total expected ultimate recovery, risk, and proximity to existing infrastructure.
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A final decision on the work program's details and scope will occur after the anticipated report on the prospective resources is received. GLJ Petroleum Consultants is expected to issue its report in July.
Currently, Trillion said it plans to conduct three rig-based workovers of existing wells tied into the pipeline to return the wells into full production. Also, four undeveloped but proven discoveries previously drilled are targeted for production.
The company said it expects its development efforts to achieve production of 6.7 billion cubic feet (BCF) gas from behind casing gas in the existing producing wells for a before tax NPV10% value of US$41.6 million and 10.8 BCF from the four undeveloped discoveries for a before tax NPV10% value of US $37.9 million. The NPV10% valuation is the discounted value of the reserves after all capital development, operating costs, and royalties before taxes are discounted to present-day dollars.
Trillion said the work program is anticipated to take five to six months, which may be extended. The wells will enter production a few days after spudding, processed in the existing facility, and sold under a take or pay sale contract. The anticipated cost for Trillion’s reserves development on its 49% share of SASB is about US$26 million.
“The reserve and resource reports are part of our strategy to develop a bankable asset that could be leveraged to obtain debt financing for development,” said Trillion CEO Art Halleran in a statement.
“We have been in touch with key potential lenders who have demonstrated an interest in evaluating the project. We believe that our reserves, operating history and current infrastructure de-risks the project so a debt facility may be feasible.”
Vancouver-based Trillion owns a number of strategic oil and gas assets in Turkey and Bulgaria.
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