Australia's Pancontinental Oil & Gas NL (Pancontinental, the Company) disclosed Friday that Tullow Kudu Limited, a subsidiary of Tullow Oil (Tullow), has elected to continue as a participant in the joint venture in Namibian license PEL 37 and, as such, is committed to drilling one exploration well subject to identifying a drillable prospect.
To date 4 large turbidite Prospects and 3 large Leads have been mapped in detail. The Prospects have potential for combined Prospective Resources of more than 900 million barrels of oil (recoverable).
So far Tullow has spent approximately $34 million on the exploration program,including Pancontinental’s share of expenditure carried under farmin.
In 2013, Pancontinental successfully negotiated a farmin agreement with Tullow whereby a 65 percent interest would be transferred to Tullow in exchange for the following work program:
The seismic program has been completed with the 3D covering approximately 17 percent of the permit.
April 7, 2016 is a significant milestone for the project because Tullow was entitled under the farmin agreement to withdraw from Namibia PEL 37 and re-assign its interest to Pancontinental by giving written notice on or before this date.
Tullow has elected to continue in the joint venture and, as operator, will continue to work towards drilling that is required by March 27, 2017 under the farmout agreement between Pancontinental and Tullow, provided that a drillable prospect is identified from the 2D seismic or 3D seismic.
About Petroleum Exploration License 0037
PEL 37 covers three adjacent blocks over some 6,564 square miles (17,000 square kilometers) in the blocks in the central Walvis Basin offshore Namibia.
PEL 37 covers the central zone of an oil-mature Fairway, an oil generating “sweet spot” where oil prone source rocks are sufficiently buried to generate oil.
Oil source rocks and an oil recovery were made in Wingat-1 on-trend to the south.
Four large turbidite Prospects and 3 large Leads have been mapped so far on 3D seismic in the central part of the Fairway.
The Prospects have cumulative potential exceeding 900 million barrels of potential Prospective Resources*, of which 260.8 million barrels net is attributable to Pancontinental’s 30 percent share.
Pancontinental has estimated the Prospective Resource potential using factors including estimates of the area of the Prospects, of to what level the Prospects may be oil filled, the thickness, geometry, porosity and net to gross factors of the potential reservoirs, oil saturations and commercial recovery factors. The estimates have been made on a deterministic basis and no probabilistic estimates or chances of drilling success have therefore been made in this case.
Going forward, participants in the joint venture will be:
Barry Rushworth, CEO and director of Pancontinental commented:
“Tullow’s decision to stay in PEL 37 for drilling is a huge stamp of approval for this project, particularly in the current industry climate.
Tullow is a first-class Operator and we are delighted that Tullow has decided to stay in PEL 37 for drilling.
Offshore Namibia, virtually all of the acreage is taken up under exploration licenses. With such a high level of industry interest it is widely thought that offshore Namibia will become a next major focus of African oil exploration.
In PEL 37, Pancontinental has a strong 30 percent carried interest in a very large license area in a prime geological setting, with a variety of Prospects already mapped on 3D seismic and more anticipated as exploration continues.
Pancontinental’s share of the Prospective Resources identified so far is some 260 million barrels of oil [recoverable]*.
Pancontinental is extremely well placed as the joint venture carries on towards drilling”.
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