Dominion announces that the Mihambia-1 exploration well in the Mandawa Production Sharing Agreement ('PSA') area, Tanzania, has been plugged and abandoned at a total depth of 2,508m. The potential reservoir rocks in the targeted Middle Jurassic Mihambia formation, were poorly developed and water-bearing. Oil shows were noted from the deeper Nondwa Formation claystones, a predicted hydrocarbon source rock in the area. The data from the well will be the subject of a detailed technical analysis. The partners in the Mandawa PSA are Dominion's subsidiary Dominion Oil & Gas Ltd. (50% interest and operator) and Les Etablissements Maurel et Prom SA (50% interest).
Mihambia-1 is the first of a series of at least four onshore Tanzania exploration wells in which Dominion will participate. A second well is planned in the Mandawa PSA area in the second half of 2009. In the Kisangire PSA area, Dominion will participate in two wells to be drilled in the future by partner and operator Heritage Oil Limited. Dominion's costs are fully carried by Heritage Oil through the first exploration well.
Dominion is further pleased to announce preliminary results from exploration activities recently completed in Uganda (Exploration Area 4B) and offshore Tanzania (Block 7).
Exploration Area 4B in Uganda is located in south-western Uganda in the Lake Edward and Lake George segment of the Albertine Graben. The adjacent basins, Southern and Northern Lake Albert and the Pakwach, have been the sites of several major oil discoveries in the last two years including those of Kingfisher, Warthog and Buffalo-Giraffe. In November of 2008, Dominion Uganda Ltd. completed the acquisition of 371km of 2D seismic data onshore and 130km on Lake Edward. Preliminary interpretation has shown the presence of a substantial sedimentary basin that deepens to the west and which is broken up into numerous tilted fault blocks similar to those which have proved to be oil discoveries in Northern Lake Albert. Dominion already has a portfolio of three prospects, all of which can be drilled from onshore locations using a land rig, and expects this number to increase when the interpretation of the fully-processed seismic is complete. The largest prospect has an area comparable to that of the Buffalo-Giraffe discovery in Exploration Area 1 (48 square kilometers) reported to probably contain more than 400 MMbbl of recoverable oil. Geochemical analyses of oil samples collected on land in Exploration Area 4B and on the surface of Lake Edward indicate that the basin contains mature source rocks that have generated petroleum.
Exploration Area 4B is held under a Production Sharing Agreement by Dominion Uganda Limited (equity interest 100% and operator). Within the first two-year exploration period which expires in July 2009, Dominion Uganda Limited is obliged to acquire 300km of seismic data (501km completed) and in the second two year period, drill at least one exploration well. In light of the seismic interpretation, Dominion is considering an accelerated and more extensive drilling program.
In offshore Tanzania Block 7, Dominion has concluded the first phase of interpretation of approximately 4,350km of 2D seismic lines acquired in late 2007 and early 2008. The interpretation shows several large structural closures ('prospects and leads') in water depths that are well within the capabilities of drill ships and semisubmersible rigs. One of these lies beneath 1,520m of water with a further 2,130m of drilling required to reach a proposed Palaeocene sandstone target. This prospect has a mapped most-likely closure of 103 square kilometers and the potential to contain around 1,000 MMbbl of recoverable oil.
Block 7 is held under a Production Sharing Agreement by Dominion Tanzania Limited (100% interest and operator). Within the first four-year exploration period which ends in March 2011, Dominion Tanzania Limited is obliged to acquire 4,000km of 2D seismic which has now been completed and a further 500 square kilometers of 3D seismic, which is anticipated to be undertaken towards the end of 2009 / early 2010.
As previously stated, financing of Dominion's forward program remains a top priority. The Company can confirm that it is currently in discussions with a number of parties with regards to funding its forward plans. Whilst successful completion of these discussions cannot be assured, the Company remains confident financing will be secured in a timely fashion to enable its exploration program to continue accordingly.
Mike Garland, Chief Executive Officer of Dominion, said, "We are of course disappointed with the results of the Mihambia-1 well. However Dominion's success is not dependent on the results of a single well and we remain very hopeful that the remaining wells to be drilled in the Tanzania program will result in a discovery over the next two years. We are delighted with the results of the preliminary interpretation of the Uganda Exploration Area 4B seismic data. These have confirmed Dominion's view -- that the prospectivity of the Lake Edward Basin is comparable to that of Lake Albert. Now that we are starting to define large prospects, we want to move towards a drilling program as quickly as possible. Drilling offshore in Tanzania Block 7 is not imminent but this clearly has the potential to be a major asset for the company."
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