South Africa’s SacOil has announced the completion of phase one of its Lagia oil field development project.

The company has successfully applied hydraulic stimulation to all five existing wells with initial production starting on 4 January 2015.

SacOil says 350 barrels of oil a day (b/d) will be achievable from these five wells once they are fully operational.

Phase two of the project is set to start by June 2015 and will involve the instillation of steam facilities and the drilling of up to five additional thermal wells.

“The next phase of our operations at the Lagia oil field will focus on increasing production, as well as maintaining cost efficiencies and profitability during this oil price cycle,” said Thabo Kgogo, SacOil’s CEO.

“The lower oil price environment is something we are obviously following very closely. For the time being our net cash position remains positive and we remain committed to our strategic focus of portfolio rationalisation, capital restructuring and overall cost savings.”

The Lagia project is being developed through SacOil’s subsidiary, Mena International Petroleum Company.

Oil produced from the Lagia field is trucked to Egyptian General Petroleum Company (EGPC) facilities located around 300km from the Lagia field. Payments for delivered crude are paid directly to Mena International Petroleum Company.

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