EnerGulf Resources Inc. reports that drilling and logging operations on the Kunene-1 have been completed. The well had significant hydrocarbon shows. EnerGulf believes the results of the operations to date have enhanced the prospectivity of Block 1711 by demonstrating that hydrocarbons are present. At this date we believe that this first well ever drilled in the Namibe Basin south of Angola, will probably not be a commercial producer. However, Sintezneftegaz Nambia Ltd. has determined to test the well for natural gas in a particular zone. The test is estimated to take an additional 16 days. EnerGulf has elected not to participate in this operation. EnerGulf believes the Kunene well information will allow EnerGulf to evaluate existing prospects and identify new leads and prospects on the block.
Although, EnerGulf has elected not to participate in the testing of the well, per the Joint Operating Agreement, EnerGulf may elect to pay 100% of its share of the test's costs it would have incurred had it participated, and an additional sum of the same amount, to re-instate its pro rata rights in a commercial discovery in the interval being tested.
Energulf has reported that the Petroleum Agreement between the Government of Namibia and the parties has been amended, to reflect that the parties have been relieved from performing all other minimum exploration work obligations required over the Initial Exploration Period, including the minimum exploration expenditure and the requirement to drill a second well, because per the agreement, the Kunene-1 well drilled below the original planned depth of 4,400 meters (Albian/Aptian stage in geological time) to a depth of 5,050 meters below sea level and tested the syn-rift (Barremian stage in geological time).
Energulf also reports that it has engaged the firm Petrophysical Solutions Inc.(PSI), of Houston, Texas, as consultants (to further compliment its other geophysical consultants), primarily to provide expert oil and gas electric log analysis and rock and fluid interpretation for the Kunene-1, and guidance for Energulf's Block 1711 and Lotshi Block exploration programs.
The Republic of Namibia has classified the Kunene-1 as a "tight hole", meaning no information regarding the well may be released until such time as the Namibian government determines to make the information public.
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