The last time we visited Spanish Lookout on April fourth, engineers had just completed drilling on the well known as Mike Usher #4. Well, now, testing on that well has been completed and, according to the company, it is producing 2,700 barrels a day. Work has now started on drilling for a fifth well. But even with Usher #4 producing at a generous clip, BNE is downgrading its official estimate of the oil reserves in the area. Instead of 6 million barrels, that estimate is now 5.5 million barrels.
In other news, this week, BNE will propose to government that it build a pipeline system to take oil and gas from all wells in Spanish Lookout to a central tank facility in South Iguana Creek. The proposal is that at that site, gas will be burned in a power plant for electricity generation. This will eliminate the fumes associated with the flaring in Spanish Lookout and reduce the tanker traffic in the area.
BNE's release also discusses the possibility of what's called a "topping plant," which is a plant to produce fuel from low volumes of oil on a non commercial basis. It's an interesting idea and one not to be confused with a refinery - which is a far different proposition. BNE says it has completed a study for that plant as well as others for additional pipelines, and an offshore loading facility. But the release says BNE can't move on these projects until the proven reserves are increased and government institutes what the company calls a, "stable tax environment."
