EnerGulf: Offshore Namibia Contracts Awarded

EnerGulf Resources Inc. on Tuesday issued an operational update on Block 1711, located offshore Republic of Namibia.

The Block 1711 Joint Operating Committee, comprised of Sintezneftegaz of Moscow; PetroSA, the national petroleum company of South Africa; NAMCOR, the national petroleum company of Namibia; and EnerGulf, has held regular meetings in both Windhoek, Namibia, and Moscow and has established procedures for the awarding of the various contracts required for the ongoing work program.

Under the criteria established by the Joint Operating Committee, three contracts have been awarded to date from bids made by multiple qualified companies.

The contract for the reprocessing and reinterpretation of 2D and 3D seismic data to further confirm the optimal drilling location on the prospect for the Kunene #1 identified by 3D data, as required by the Production Sharing Contract ("PSC") with the Government of Namibia, has been awarded to WesternGeco (Schlumberger).

The contract for developing the Drilling Program and engineering monitoring for the Kunene #1 exploratory well construction has been awarded to Halliburton. Drilling is scheduled to commence by March 2008.

The contract for the Environmental Impact Assessment for scheduled drilling operations on Block 1711 required by the PSC has been awarded to Risk-Based Solutions of Namibia.

Negotiations regarding the awarding of the well construction management and the drilling contract are currently underway with companies that should secure proposals for rig availability, and a drilling rig that appears to be available for drilling the Kunene #1 has been identified.

Block 1711 is situated in the Namibe basin off the northern coast of Namibia along the international boundary with Angola. Two separate exploration prospects have been identified by extensive modern seismic data on the 8,931-square-kilometer block, being the Kunene and Hartmann prospects. There are other undeveloped leads.

The Kunene prospect is defined by a 650-square-kilometer, three-dimensional (3D) seismic survey. The structure forms a four-way dip closure covering 95 square kilometers, with vertical closure of approximately 650 meters. A number of direct hydrocarbon indicators, including gas chimneys and bottom-simulating reflectors (BSR), have been identified by the seismic survey. The technical reviews by the previous license holder also indicate that an oil slick has also been identified by satellite radar situated down current from the Kunene prospect.

The Hartmann prospect has been delineated by extensive two-dimensional (2D) seismic surveys. It is identified as a stratigraphic trap with an area of 343 square kilometers and approximately 1,600 meters of vertical relief. The target carbonate reservoir section is believed to be the same age as that of the Kunene prospect.

Bill St. John, Ph.D., EnerGulf's adviser for African and other international oil and gas exploration operations, and a member of the American Association of Petroleum Geologists ("AAPG"), stated: "Block 1711 contains the most attractive undrilled structure that I have seen in over 40 years of exploring for oil and gas internationally. In my opinion, each of the Kunene and the Hartmann prospects are of a sufficient size to have the potential to contain a 'giant field,' being over 500 million barrels (as defined by AAPG)."

As EnerGulf announced on September 8, 2006, the company received a Netherland, Sewell & Associates Inc. ("NSAI") prospective resource assessment of the Kunene and Hartmann prospects located in Block 1711 offshore Namibia. The report, dated July 27, 2006, is in accordance with Canadian National Instrument 51-101 and other Canadian, United States and international standards.

The report covers the oil case and an alternative (independent) gas case for the Kunene and Hartmann prospects and provides prospective hydrocarbon resource estimates in low (conservative, P90 confidence level), best (realistic, most likely) and high (optimistic, P10 confidence level) categories in each case. The report's risk analysis, as reported in EnerGulf's news release dated September 8, 2006, provides a range of probabilities of hydrocarbon occurrence for both the Kunene and Hartmann prospects. Additionally, as reported in the September 8, 2006, news release, NSAI conducted a scoping economic analysis of the Kunene prospect only, using the best estimate for both an oil case and a gas case. (The scoping economics in the report does not include the additional Hartmann prospect.)

                     UNRISKED GROSS (100 PERCENT)

OIL CASE (MMBO-millions of barrels)
Kunene                                            Oil (MMBO) Gas (BCF)
------------------------------------------------- ---------- ---------
Low estimate                                         126       123
Best estimate                                        454       445
High estimate                                        921       899

Low estimate                                         863       618
Best estimate                                       2,704     1,928
High estimate                                       5,118     3,671

GAS CASE (BCF-billions of cubic feet)
Low estimate                                         11        720
Best estimate                                        38       2,561
High estimate                                        78       5,209

Low estimate                                         69       4,592
Best estimate                                        211      14,064
High estimate                                        399      26,461

Regarding the Company's Lotshi Block in the Democratic Republic of Congo ("DRC"), EnerGulf understands that the delay in receiving the decree is due to the Constitution of the DRC being amended shortly after the PSC was signed, which then required the decree of the future new government. The new government of the DRC has just recently been installed and the National Assembly met on March 15, 2007, for the opening of its first ordinary session. EnerGulf has paid its signature bonus of US$500,000 for the Lotshi Block and expects such decree in the near future.

EnerGulf is also pleased to announce a private placement of up to 4,000,000 units at $0.70 per unit to raise proceeds of up to $2,800,000, subject to acceptance by the TSX Venture Exchange. Insiders of EnerGulf may be subscribing for a portion of the private placement.

Each unit will consist of one common share and one warrant entitling the holder to purchase one additional common share at a price of $0.90 for a period of one year.

Finders fees will be payable on a portion of the private placement in accordance with the policies of the TSX Venture Exchange. Proceeds of the private placement will be used for the Company's oil and gas exploration projects and for working capital.

Commenting, Jeff Greenblum, Chairman of the Board of EnerGulf, said: "Significant progress is being made on the pre-drilling and drilling work program for Block 1711. EnerGulf is working very closely with its partners in Block 1711 to insure that the work program is carried out in an efficient and cost-effective manner. We are pleased to have awarded important contracts to such established and qualified companies as Western Geco and Halliburton and look forward to working with them as we prepare to drill this very exciting prospect. In the DRC, we remain optimistic about the Lotshi Block and expect that recent developments in the DRC government will enable our decree to be forthcoming. We remain committed to prudent capital structure management as is evident by our shares outstanding. This financing allows us to protect our shareholders' interests and maximize value as we advance our projects forward."

Related Companies
 Company: Halliburton Companymore info
 - Halliburton, US Silica Set North America Record (Oct 17)
 - More Than 350 Oil Service Workers Laid Off in Norway Due to Strike (Sep 28)
 - Norway Services Strike Affects Schlumberger, Baker Hughes, Halliburton (Sep 21)
 Company: Western Gecomore info
 - PGS and WesternGeco Win Barents Sea Seismic Work (Mar 11)
 - Schlumberger Takes Minority Stake in PetroMarker (Oct 5)
 - WesternGeco Releases New Technologies for Onshore, Offshore Ops (Jun 13)
 Company: Schlumbergermore info

 - Schlumberger Sees 2% Fourth-Quarter Profit Hit From Iraq shutdown (Dec 3)
 - Schlumberger to Restart Iraq Rumaila Oil Operations, Official Says (Nov 14)
 - Schlumberger Opens New Reservoir Laboratory in AU (Nov 12)
 Company: Energulf Resourcesmore info
 - EnerGulf Estimates 3.16B Barrels at Offshore Namibia Block (Feb 21)
 - EnerGulf to Increase Interest in Namibia Block (Oct 12)
 - EnerGulf Charges Ahead in Congo, Offshore Namibia (Feb 2)
 Company: Netherland, Sewell & Associates, Inc.more info
 - Nicolet Permit's Utica Shale Contains OGIP of 8.67 TCF (Feb 9)
 - Questerre's Utica Shale Discovery Assessed at Over 4 Tcf (Sep 1)
 - Stone Energy Boosts Year-End Natural Gas Reserves (Feb 10)
 Company: Namcormore info
 - Chariot Commences 3D Seismic Program Offshore Namibia (Jan 18)
 - OMV Enters Namibian Exploration Project (Apr 3)
 - Eco Atlantic Inks Joint Operating Agreements for Offshore Namibia (Jan 28)
 Company: PetroSAmore info
 - Tullow Starts TEN Production Offshore Ghana (Aug 18)
 - South Africa, Congo to Cooperate On Oil Exploration (Oct 23)
 - PetroSA, Cairn India Partner to Explore for O&G In South Africa (Aug 16)
 Company: Sintezneftegazmore info
 - EnerGulf Updates on DRC, Namibia Projects (Feb 13)
 - EnerGulf Comments on Offshore Namibian Project (Dec 30)
 - EnerGulf Continues Drilling at Kuene Offshore Namibia (Jun 20)
 Company: American Association of Petroleum Geologists (AAPGmore info
 - Schlumberger Recognizes AAPG Student Chapters (Apr 3)
 - EnerGulf: Offshore Namibia Contracts Awarded (Mar 21)
 - Emerald Announces Estimated Reserves for Centauro Sur (Feb 27)
For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit www.riglogix.com.

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Technical Coordinator
Expertise: Client Representative|Process Management|Technical Writing
Location: Houston, TX
Executive Assistant
Expertise: Executive|Secretarial or Administrative
Location: United States
Regional Manager - Saybolt
Expertise: Executive|Operations Management
Location: Linden, NJ
search for more jobs

Brent Crude Oil : $51.78/BBL 0.77%
Light Crude Oil : $50.85/BBL 0.83%
Natural Gas : $2.99/MMBtu 4.77%
Updated in last 24 hours