BW Energy, an operator of the Dussafu Marin licence in Gabon and the Golfinho cluster offshore Brazil reported EBITDA of USD 130 million for the third quarter of 2024. This was up from USD 75.9 million in the previous quarter, due to higher oil sales following record quarterly production in Gabon. The net production from operated assets was 25,570 bbls/day. This includes the Tortue, Hibiscus, and Hibiscus South fields in the Dussafu licence (73.5% working interest or WI) and the Golfinho field (100% WI).  

“BW Energy delivers record quarterly production and cash-flow from operation in the third quarter, supporting attractive appraisal, development, and field optimisation programs across our growing asset base in Gabon, Brazil, and Namibia,” said Carl K. Arnet, the CEO of BW Energy. “We are also pleased to meet our Dussafu production target of 40,000 barrels a day gross, well before year-end, and following new low-cost, low-risk development wells and successful ESP replacements. The ongoing drilling campaign has expanded our asset and reserves base, and with further wells to complete and work-over, we are confident that we can maintain production at FPSO BW Adolo capacity for longer.” 

 Dussafu 

BW Energy completed two liftings in the third quarter at an average realised price of USD 82/bbl. BW Energy’s net production was approximately 1.9 mmbbls of oil. The net sold volume, which is the basis for revenue recognition in the financial statements, was approximately 2.0 mmbbls including 195,000 bbls of DMO deliveries and 232,800 bbls of state profit oil with an under-lift position of 391,500 bbls at period-end.  

Net production from the Dussafu licence averaged 20,150 bbls/day, supported by the ESPs (electrical submersible pumps) on wells producing to the MaBoMo facility. Third quarter production cost (excluding royalties) decreased to USD 20.5/bbl from USD 29/bbl in the second quarter, which was impacted by scheduled facility maintenance. Production cost was in line with the year-end target level and reflects improved operational efficiency and increased production.  

In July, production started from the DHBSM-2H well on Hibiscus South, in August the DHIBM-3H workover was completed, and in early October DHIBM-7H started production, all with conventional ESPs. In late September, the DHBSM-1H ESP failed as the last of the defective generation, with change-out completed and production restarted mid-October. Workover of DHIBM-4H was completed in early November, leaving three remaining wells scheduled for conventional ESP change-out before year-end.  

OTHER ITEMS  

At 30 September 2024, BW Energy had a cash balance of USD 209 million, compared to USD 244 million at end-June. The decrease reflects cash flow from operations, debt repayment and investments including acquisition of shares in Reconnaissance Energy Africa Ltd (ReconAfrica). The Company had a total drawn debt balance of USD 556 million including the MaBoMo lease, the Dussafu RBL, the Golfinho prepayment facility, and bond debt.

On 1 August, the Company expanded its position in Namibia through the acquisition of a 6.6% shareholding plus share purchase warrants in ReconAfrica. BW Energy also received a 20% non-operating interest in the onshore Petroleum Exploration License 73 (“PEL 73”) in Namibia.  

Production guidance for 2024 is maintained at between 10 and 11 mmbbls net to BW Energy. Full-year production cost (excluding royalties) is expected to be USD 30 to 32/bbl, in the lower end of the previous range due to higher production at Dussafu. Expected net capital expenditures is unchanged at around USD 350 million.  

DEVELOPMENT PLANS 

BW Energy is in process of completing the DHIBM-5H well workover, bringing the number of Hibiscus / Ruche Phase 1 producing wells to seven. Following completing of the remaining two well workovers and ESP change-outs, the Company will appraise the Bourdon prospect, targeting potential gross recoverable reserves of ~30 million barrels in Gamba and Dentale formations. 

At end-October, BW Energy signed production sharing contracts (PSCs) for the Niosi Marin and Guduma Marin (formerly named G12-13 and H12-13) exploration blocks which are adjacent to the Dussafu licence. BW Energy holds 37.5% WI in both blocks, and is the operator of the blocks, which significantly expands the resource base for infrastructure-led exploration. The PSCs have an eight-year exploration period with option to extend for two more years. The partners have committed to drilling one well on Niosi Marin and intend to carry out a 3D seismic acquisition campaign. 

In Namibia, BW Energy has sanctioned the drilling of an appraisal well targeting the Kharas Prospect north-west on the Kudu formation. Long-lead items have been secured and the Company is reviewing offers for rig capacity.  There is a close dialogue with other operators in the Orange Basin on exploring common use available resources. Development planning and concept selection for the Kudu gas-to-power project also continued with relevant stakeholders.