Galp to spud offshore Morocco well on June 15

Tangiers Petroleum, with regards to the drilling campaign in Morocco today said  the dry hole cost for the drilling of TAO-1, on a trouble free basis, is ~US$73m and in line with the previous estimate released to market.

On this basis, Tangiers is fully covered, for the drilling, by existing cash and receivables, including headroom for material cost overruns.

“Given the weather conditions, shallow water depth and well control in the region, the Company does not expect overruns but cannot guarantee that these will not occur and cautions investors that operational risk can never be fully mitigated, ” Tangiers said in a statement.

Spud Date Imminent

Tangiers also said that the Ralph Coffman jack-up rig was successfully loaded onto the heavy lift vessel MV Transshelf on the 25th May 2014 and is on track to deliver the rig nearby to the spud location on or about the 4th June 2014. The rig will undergo final checks and kitting out before being towed to site, where drilling is scheduled to start on or about the 15th of June, in line with previous guidance for a mid-late June spud.

Tangiers said that the TAO-1 well is a potential company-maker for Tangiers with 190 million barrels of net best estimate unrisked prospective resource (gross unrisked best estimate 758 million barrels).

Tangiers has a 25 percent participating interest in the Tarfaya Offshore Block, which is being operated by Galp Energia who has a 50 percent interest. The remaining 25 percent interest is held by ONHYM (Morocco’s National Office of Hydrocarbons and Mines), who are carried through the exploration phase.

The TAO-1 well is located within a proven petroleum system, adjacent to the Cap Juby oil discovery, and is targeting three stacked objectives.