Block 10BB and other Blocks in Kenya
A two rig drilling program commenced during the first quarter of 2012 with two wells spud. In Block 10BB (Kenya), the Company discovered over 100 meters of net oil pay in Ngamia-1, the first Tullow-Africa Oil joint venture exploration well to be spud. In the Dharoor Block (Puntland (Somalia)), the Company announced that the Shabeel-1 well has completed drilling and petrophysical analysis indicates a potential net pay zone of 12 to 20 meters in the Upper Cretaceous Jesomma Formation and an additional potential 3 meters of net pay in the Jurassic Adigrat Formation. Additional details are provided below.
It is anticipated that two additional drilling rigs will be secured and mobilized into the Company’s areas of operation during the second half of 2012, bringing the total number of rigs in operation to four before the end of the year. It is anticipated that one additional rig will be utilized in Ethiopia and one additional rig will be utilized in Kenya. In addition to the Shabeel-1 and Ngamia-1 wells, which have completed drilling or are in the process of being drilled, four additional wells are currently planned: the Twiga-1well in Block 13T (Kenya), the Paipai-1 well in Block 10A (Kenya), the Shabeel North well in the Dharoor Block (Puntland (Somalia)), and an additional exploration well in the South Omo Block (Ethiopia). The Company will also continue to actively acquire, process and interpret 2D seismic over Blocks 10BA, 10BB, 12A, 13T and South Omo.
The Company and its operating partner on the Block, Tullow, spudded the partnership’s first well, Ngamia-1, on January 24, 2012. The Ngamia-1 exploration well in Kenya has now been deepened to a total depth of approximately 1940 meters. The well has encountered in excess of 100 meters of net oil pay in multiple reservoir zones over a gross interval of 650 meters of the upper Lokhone sandstone (855 meters to 1500 meters). The reservoirs in these sections are composed of good quality Tertiary age sandstones. Moveable oil with an API greater than 30 degrees has been recovered to surface from four representative intervals. This oil has similar properties to the light waxy crude which has been discovered in Uganda by Tullow. Plans are in place for at least two drill stem tests upon completion of drilling operations. The Ngamia-1 well is now being drilled to a depth of approximately 2,700 meters to explore for deeper potential including the lower Lokhone sandstone which was one of the primary objectives of this well. The Ngamia-1 well has encountered additional oil and gas shows over a gross interval of 140 metres from a depth of 1,800 meters to 1,940 meters. The reservoirs are similar to those previously encountered at a shallower depth.
The positive results of the Ngamia-1 well have led the Company and its operating partner to accelerate the pace of exploration activities along the Ngamia-1 trend in Block 10BB and adjacent Block 13T. It is planned that one additional rig will be brought into Kenya as soon as possible and an additional 850 km of 2D seismic data will be acquired as infill across the trend which has been de-risked by the Ngamia discovery. The 2D infill seismic is to further evaluate the Ngamia discovery and adjacent prospects.
The drilling of the Ngamia-1 well satisfies the last remaining work obligation (first period) under the Block 10BB PSC.
Following the Ngamia discovery, the Company and its operating partner on the Block, Tullow, have focused additional efforts to better delineate the prospects along the Ngamia trend northward into Block 13T. Based upon the recently acquired 500 km of 2D seismic data, 3 prospects and 3 leads have been mapped in Block 13T. Additional 2D seismic is now being acquired in conjunction with Block 10BB to mature the leads to drillable prospects. The Company has fully satisfied its work obligations (first period) under the Block 13T PSC.
The Company and its operating partner on the Block, Tullow, have agreed on the location of the first exploratory well in Block 10A. The prospect to be drilled is the Paipai prospect with a proposed total depth of 4150m. Paipai-1 will test a large four-way closed structure with Cretaceous-age sandstone targets at multiple depths. As part of the accelerated exploration efforts mentioned above, the current plan is to move the Weatherford 804 rig, currently at the Ngamia-1 location, to Block 13T and an additional rig will be mobilized to Paipai-1 as soon as possible. The Paipai civil works associated with the location have been completed and sufficient materials have been purchased and mobilized to the location for drilling operations. The Paipai-1 well will complete the required work obligations (first period) under the Block 10A PSC.
The Company and its operating partner on the Block, Tullow, have initiated the onshore 2D seismic program along the western shores of Lake Turkana. Approximately 17% of the 1350 km of planned 2D seismic have thus far been acquired. The offshore and nearshore portions of the 2D program will commence in July of this year. The 2D seismic program will fulfill the work obligations (first period) under the Block 10BA PSC.
Based upon the recently acquired FTG survey, the Company and its operating partner on the Block, Tullow have identified a primary area of interest, the Kerio Valley in the southwestern portion of the block where a 500km 2D seismic acquisition program will be focused. The seismic crew in Block 13T is expected mobilize to Block 12A in the second half of 2012 upon completion of seismic in Block 13T. The 500km 2D seismic program will satisfy the work obligations (first period) under the Block 12A PSC.
The Company holds a 100% interest and acts as the operator in Block 9 where a major new seismic acquisition program of 750 km was completed in 2011. The new data was acquired over the Kaisut subbasin in northwestern Block 9. Based upon the new data set, several large prospects have been mapped and resources have been estimated. The Company is currently discussing farmout opportunities on this block to bring in one to two partners. One exploration well is expected to be drilled during 2013, which will satisfy the remaining work obligations (second period) under the Block 9 PSC.