Artumas Group Inc. has issued an exploration and operational update for its African assets, specifically highlighting seismic activity in these blocks.
Seismic recording is scheduled to commence before the end of the month over the planned 500 km 2D seismic data acquisition program in the Artumas operated Onshore Rovuma Block. As of mid-August, over 480 km of seismic lines have been cut and over 225 km have been surveyed in preparation for data recording.
The 3D seismic data gathered earlier this year on the Area One Offshore Block is currently being processed with interpretation to commence in September. Quality of the data is excellent and shows the presence of attractive structures and amplitude anomalies which indicate potential reservoir development It is expected that multiple high potential drilling locations will be forthcoming from the large number of structures identified by the new seismic data. Drilling locations are targeted to be finalized in Q1:2009.
Tanzania – Large Scale Off-take Commercialization:
Artumas received approval in July 2008 from the Government of Tanzania to utilize a portion of the Mnazi Bay Concession gas resource as feedstock for a proposed 300 MW gas-fired power generation project in Mtwara.
A Memorandum of Understanding regarding commercial terms for the Project is under discussion between Tanzania Electric Supply Corporation (TANESCO), AG&P Gas, and the target off-take consumer. Discussions regarding Project financing and, in particular, funding sources for the transmission inter-tie, will be continuing through the coming months. At the same time, the Company is having discussions with two Independent Power Developers to take on the role of Project developer.
During the past year, the Government of Tanzania has been assessing its long term domestic energy needs relative to existing and projected domestic energy supplies, in order to prioritize the application of domestic energy resources to various end-uses, including energy exports. The Government has indicated to Artumas Group that this process has been concluded, and the Company will shortly receive final direction regarding the movement of Mnazi Bay Concession natural gas to off-take markets in Mombasa, Kenya.
Further, an "open season" exercise is planned over the coming months, coordinated by the Government of Tanzania, soliciting proposals for urea/ammonia fertilizer manufacture in Mtwara harbor at or above an agreed floor price for Mnazi Bay Concession gas delivered to Mtwara.
Tanzania – Seismic Program:
Artumas has recently completed 130 kms of 2D seismic to identify exploration drilling locations in the Mnazi Bay concession. Preliminary interpretation of the data is extremely encouraging with multi Tertiary and Cretaceous targets located approximately 20 km from the two existing proven fields.
On the basis of (i) this new 2-D seismic analysis, and (ii) the identification of vertical well locations in the Mnazi Bay development plan using existing 2D seismic data, Artumas has decided to defer the 3D seismic survey over the Mnazi Bay development area, in favor of directing capital to exploration drilling opportunities on the Concession. It is anticipated the drilling program will commence in 4Q:2008, with the drilling of two development wells and one exploration well over the subsequent 12 month period.
Artumas has opened a data room, to farm-out a percentage of the company’s exploration and development acreage holdings in Tanzania and Mozambique. It is anticipated that this divestiture and risk-management strategy will provide the company with additional capital to execute its exploration and development capital program through 2010. This process will be concluded in 4Q:08.
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