HOEC talks to John and Quippo for Dirok wells

Vol 19, PW 5 (05 Nov 15) Exploration & Production

HOEC says it is on track to develop the Dirok gas discoveries at its AAP-ON-94/1 block in Assam despite industry doubts about the company’s financial health.

PETROWATCH learns HOEC is talking to drillers John Energy and Quippo to hire a 1000-hp rig to workover discovery wells Dirok-1, Dirok-2 and Dirok-4 under Phase-I of its accelerated development plan so it can finally begin gas production. “Our plan is to begin workover operations in mid-February (2016),” we hear.

HOEC has already placed orders for long-lead items like X-Mas trees and wellheads for the three wells, which it believes can produce between eight to 10m cf/d (226,000–283,000 cm/d). “We’ll begin generating revenue from these wells in the next two or three months,” we hear.

In Phase-II HOEC will drill two new development wells which it expects will add 20m cf/d (560,000 cm/d) gas to production. Our source dismisses rumours HOEC is having problems arranging funds for the Dirok development.

“Funding is not a concern,” he says. He explains that the total cost of the development is about $85m.

Of this almost $60m or 70% will come from HOEC partners IndianOil and Oil India. “Our share of investment will be $22.85m,” we hear.

“That money will be required over 18 months. Dirok will begin generating revenue from the middle of next year.