Australian-based Tangiers Petroleum Ltd. has declared that it is fully funded for drilling of the TAO-1 prospect offshore the Moroccan Atlantic coast to commence.
The exploration company, which owns a 25-percent share in the TAO well, confirmed that the dry hole cost for the drilling “on a trouble-free basis” would cost $73 million, which is in line with a previous estimate.
Tangiers said it expected the TAO-1 exploration well to spud on or about June 15. The company has described the prospect as a “potential company-maker” due to its 190 million barrels of net best estimate unrisked prospective resource, and 758 million barrels of gross unrisked best estimate.
Analysis by Edison Group explained that the TAO-1 well would target three separate objectives, with the smallest of the three having best estimate unrisked prospective resources of 144 million barrels, likely to be commercial on a standalone basis.
“In the event of success, we would expect the management (of Tangiers) to be pragmatic with the asset,” Edison said in a report.
“The company will not see any discovery through to production given its limited resources, so monetization is the most likely mid to long-term scenario.”
Tangiers Managing Director Dave Wall said a fast-changing environment had presented unique challenges for the company, particularly in relation to funding.
“The company is excited by the imminent drilling of the TAO-1 exploration prospect,” Wall said in a statement.
In May, Tangiers completed a $4 million raising through a share placement to help fund the drilling program. This capital added to the company receiving a $3 million bank guarantee and $7.5 million in bank costs as part of the December 2012 farm-in deal with Galp Energia, which owns a 50-percent share of the project.
The remaining 25-percent is held by Morocco’s National Office of Hydrocarbons and Mines (ONHYM).
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