Dominion Petroleum is an independent oil and gas exploration company operating in East and Central Africa. Over the last two years, Dominion has assembled a portfolio of assets covering highly prospective acreage in Tanzania, Uganda and the Democratic Republic of Congo.
On July 1, 2009, it was announced that, as a consequence of ongoing financing discussions, the Company was unable to publish its audited reports and accounts for the year ended December 31, 2008 before June 30, 2009 and accordingly the trading in its ordinary shares on AIM was suspended.
Dominion has successfully concluded its financing discussions, raising $10 million from BlueGold Capital Limited. Full details of this fund raising and the restoration of trading on AIM are provided in a separate announcement.
Roger Cagle, Chairman of Dominion Petroleum, commented, "During the year we made significant progress on maturing our asset portfolio and initiated what promises to be a very promising drilling program. We drilled our first well in Tanzania, identified four drillable prospects and eleven leads in Uganda, and delineated billion barrel-sized prospects offshore Tanzania. Our financial position has been bolstered with the securing of new funding from BlueGold, whom we are delighted to welcome as an investor in Dominion. We look forward to a very exciting 12 months as the drilling program gathers momentum on some very prospective projects."
Review of Operations
Democratic Republic of Congo
On March 17, 2008, Dominion, together with partners SOCO International plc ("SOCO") and State Oil Company Congolaise des Hydrocarbures ("COHYDRO"), signed a Production Sharing Agreement ("PSA") with the Government of the Democratic Republic of Congo ("DRC"). The PSA, subject to ratification by the President of the DRC, gives the three companies exclusive rights to explore for petroleum in Block 5 in the eastern part of the DRC next to the border with Uganda.
Dominion as operator holds a 46.75% participating interest through its subsidiary Dominion Congo Limited, with SOCO subsidiary SOCO Exploration and Production DRC SPRL holding 38.25% and COHYDRO with the remaining 15% of the participating interest.
Block 5 incorporates 7,105 square kilometers ("km2") of land and lake areas. It lies to the west of and includes part of Lake Edward and adjoins Exploration Area 4B in Uganda where Dominion has carried out exploration activity as operator since July 2007 (100% working interest). Both Blocks are part of the Albertine Rift system of sedimentary basins where significant oil discoveries have been made since 2006. During the five year first phase of the PSA, Dominion and partners are committed to acquire at least 300km of seismic data, and drill two exploration wells. The PSA is renewable for two further five-year terms.
Exploration Area 4B ("EA4B") in Uganda, held under a PSA by Dominion Uganda Limited (equity interest 100% and operator), 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 three years including those in the Kingfisher, Warthog and Buffalo-Giraffe prospects.
An airborne gravity and magnetic survey was carried out in May 2008 over the Lake Edward area (including the Block 5 PSA area in the DRC). In November 2008, Dominion Uganda Ltd. completed the acquisition of 371km of 2D seismic data onshore and 130km on Lake Edward which fulfilled the minimum work program agreed with the Government for the first two-year exploration period. Preliminary interpretation of seismic 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.
Within the second two-year exploration period which commences in July 2009, Dominion Uganda Limited is obliged to drill at least one exploration well.
On April 21, 2008 Dominion entered into a farm-out agreement with Heritage Oil Limited ("Heritage") who have acquired a 55% interest and operatorship of the Kisangire PSA (comprising the Kisangire and Lukuliro licenses) in Tanzania. Under the terms of the agreement, Heritage agreed to fund the acquisition of a minimum of 150km of 2D seismic and the first commitment well. Heritage also has an option to earn an additional working interest of 15%, thereby increasing its participating interest to 70%, by funding 87.5% of the costs of a second well.
A second farm-out agreement was entered into on September 11, 2008, whereby Etablissements Maurel et Prom ("Maurel & Prom") assumed a 50% interest in the Mandawa PSA. In return it agreed to contribute proportionately to Dominion's past exploration costs, pay for the first of two exploration wells (with Dominion paying for the second) and thereafter pay its equity share of forward costs.
Dominion moved towards drilling its first exploration well in the Mandawa PSA Area, Mihambia-1. Site preparation was complete in December and drilling commenced in January 2009. Environmental Impact Assessment work on potential drilling locations for 2010 in North Mandawa has commenced using interpreted data from the North Mandawa seismic survey which was completed in March 2008 by Upstream Petroleum Services Ltd.
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