EnerGulf to Increase Interest in Namibia Block


Namibia
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EnerGulf provided updates on Block 1711, offshore Namibia and the Lotshi Block, onshore Democratic Republic of Congo (DRC).

Block 1711 Offshore Namibia:

EnerGulf has been advised by the Namibia Ministry of Mines and Energy of certain amendments to the Petroleum Agreement ("PA") for Block 1711 offshore Namibia:

  • EnerGulf will receive an additional 5% to 9% working interest in Block 1711. This will increase EnerGulf's working interest from 10% to a minimum of 15% and a maximum of 19%.
  • NAKOR's 70% interest will be relinquished in exchange for a 10% carried interest. NAKOR's costs will be carried by the new owners of its participating interest for the 2012 work program and the drilling of the next well. NAKOR will be responsible for its proportional share of costs of any subsequent work programs and any other wells drilled on the block.
  • EnerGulf has been granted the authority to market and negotiate terms for the remaining 51% to 55% interest with potential qualified industry participants with the consent of the Ministry. EnerGulf will continue as the interim Operator under the Joint Operating Agreement ("JOA").

The co-venturers interests are now: EnerGulf 15-19%, PetroSA 10%, NAMCOR 7% (carried), Kunene Energy 0.3% (carried) and HRT 2.7% and the remaining 51% to 55% interest is to be negotiated with leading industry participants. The restructuring of the interests by the Namibia government is intended to accelerate the exploration efforts on the block.

As operator of Namibia Block 1711, EnerGulf presented the results of the 2010-2011 work program on the 2.2 million acre block, to the Namibia Ministry of Mines and Energy in Windhoek, Namibia. The work program involved a complete analysis of data from the Kunene #1 well, and a further evaluation of the block's exploration potential. The exploration studies revealed multiple prospects and leads supported by amplitude anomalies and other hydrocarbon indicators. EnerGulf's Block 1711 prospect portfolio includes a Tertiary Turbidite play and a Syn-Rift play, both of which have giant field analogs in Angola and Brazil.

Fossil evidence from the Kunene #1 well points to the potential for multiple Tertiary-age turbidite sandstone prospects. Turbidite sandstone reservoirs are common and prolific in West Africa, Brazil and Deepwater Gulf of Mexico. Regionally, turbidite sandstone reservoirs account for more than 20 billion barrels of producible reserves in Angola (Blocks 14, 15, 17 18 offshore Luanda), Nigeria (Agbami, Akpo and Bongo fields), Equatorial Guinea (Zafiro and Alba) and the Campos Basin of Brazil (Marlim and Albacora).

EnerGulf's extensive study also provided significant new information concerning the hydrocarbon potential of the Syn-Rift play, including possible seismic evidence of salt on Block 1711. The Syn-Rift rocks in Block 1711 are stratigraphically similar to the Pre-Salt rocks of the Santos Basin of Brazil (Lula, Guara and Lara fields) in the Upper Congo Basin (Malongo and M'boundi fields). These plays currently contain more than 15 billion barrels of producible reserves, and are still developing.

EnerGulf has submitted the 2012 work program for Block 1711 to the government and co-venturers. The work program includes acquiring a 3D seismic survey over the Hartmann area in the southwest portion of the block in Q1 and Q2 of 2012, as well as continued geological and geophysical evaluation. It is estimated that the 2012 work program on Block 1711 could cost approximately $15 million.

Lotshi Block, Onshore, Democratic Republic of Congo:

EnerGulf continues with plans for a mid 2012 drill program on the Lotshi Block. The Company is also commencing construction of a school and health clinic on the block as required by the community improvements provision of the Production Sharing Agreement. EnerGulf continues to consider negotiations regarding a farm-in with qualified industry co-venturers for the Lotshi Block.

The Lotshi Block covers approximately 500 square km of the Les Zones du Bassin Côtier in the onshore coastal salt basin of western DRC. EnerGulf is the operator of the project and has a 90% interest and COHYDRO, the state oil company of the DRC, holds a 10% carried interest.

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