Tower Resources plc announced Tuesday that it will exit the South West Orange Basin Technical Co-operation Permit offshore South Africa in an effort to “move towards a more balanced portfolio of proven and emerging basins”.
Tower’s wholly-owned subsidiary, Rift Petroleum Limited, and its partner, New African Global Energy SA Ltd, have agreed not to proceed with an application to convert the TCP for this ultra deep-water frontier area into an exploration right. As a result, New Age will reimburse Rift the sum of $500,000, which was paid by Rift as part of its original farm-in agreement in 2013, and which has now been terminated.
Pulling out of the TCP will enable Tower to focus its efforts in South Africa on the Algoa-Gamtoos ER, according to a company statement, which “offers greater near-term potential”. As previously announced in September 2015, approval was received from the Petroleum Agency of South Africa to enter the First Renewal Period of the Algoa-Gamtoos ER. Accordingly, the 2016 work program and budget has been approved between the joint-venture partners, Rift (50 percent interest) and New Age (50 percent operated interest).
The work program for this asset will include further geophysical work and the interpretation of previously acquired 3D seismic data with a view to seeking a partner for the next stage of operational activity.
The Algoa-Gamtoos ER includes three basins and multiple plays. The 3D seismic which was acquired in 2014 across the Algoa canyon has been supplemented by the reprocessing of an older 3D survey and the merged volume will now be interpreted with a view to defining drillable prospects for 2017/18. The license also includes “many leads” defined on 2D seismic in the Gamtoos Basin, and the joint venture will be evaluating the potential to better define these with the acquisition of additional 2D or 3D seismic in 2017.
While Tower’s current work program is focused on shallower areas, the license also includes unexplored deep-water acreage within the Outeniqua Basin. In 2014 Total attempted to drill the Brulpadda-1 exploration well in Block-11B/12B adjacent to the Algoa-Gamtoos license, however, the well was abandoned due to mechanical difficulties with equipment on the rig, although Total has indicated that it may return to drill in 2016/17. In the event of success at Brulpadda, the prospectivity of the deep-water part of Algoa-Gamtoos block would be significantly enhanced.
Tower’s CEO Graeme Thomson commented in a company statement:
“We are concentrating on the area in South Africa with the greatest near-term commercial potential, have enhanced our funding position and have also reduced our contingent commitments. The proceeds from this withdrawal mean that our South African work program for 2016 is now self-funding.”
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