Pura Vida Enters PSC for Nkembe Block Offshore Gabon
Pura Vida Energy NL has been awarded an 80% interest in a Production Sharing Contract for the Nkembe block, offshore Gabon (“Nkembe PSC”). Pura Vida will be Operator under the Nkembe PSC with the State of Gabon holding a 20% carried interest.
The Nkembe PSC was executed at a signing ceremony attended by His Excellency Etinenne Ngoubou, Minister for Oil, Energy and Hydraulic Resources and Alilat Oyima, Directeur Générale des Hydrocarbures held in Libreville on 11 January 2013. The Nkembe PSC was effective immediately upon signature and approval by Presidential Decree is expected shortly.
The Nkebme block is an area of 1,210 km2 in water depths (of 50-500 metres) about 20 km off the coast of Gabon in the oil prone Gabon Basin. The block is proximate to many producing oil fields, including several fields operated by Total, the largest operator in Gabon (refer maps on pages 2 and 3).
Pura Vida’s Technical Director,David Ormerod, said:
“The award of the Nkembe block to Pura Vida marks a significant step in our strategy to build a diversified portfolio of high quality exploration assets. Nkembe is surrounded by oil fields and we see potential in a variety of different oil plays in this mature oil province. Pura Vida has taken a high equity position demonstrating our confidence in this project and the belief that sound technical work will generate value by proving the potential of these plays.”
The Nkembe block is an area of 1,210 km2 located in the producing Gabon Basin. Discoveries in the Gabon Basin led to the establishment of the oil industry in Gabon which has thrived for over 50 years. The Basin contains extensive production from reservoirs both above and below the salt layer. Both of these plays will be targeted by Pura Vida in the Nkembe block. The reservoirs above the salt have been producing since the 1950’s when Elf Aquitaine began exploration, while the reservoirs below the salt have been producing since the 1960’s when Shell began exploration in the onshore and southern offshore of Gabon.
New technologies in seismic acquisition and processing have overcome the challenges caused by salt features, leading to a resurgence of industry interest in sub-salt plays, and resulting in a number of major discoveries in recent years. Pura Vida will apply these technologies to unlock the sub-salt potential within the Nkembe block. The Nkembe block is surrounded by producing oil fields and discoveries.
The term of the exploration period is for seven years, with a minimum work program divided into two phases described below. Upon a commercial oil discovery, an exploitation licence is granted for a period of 10 years (25 years for a gas development) with two extension options, each for a period of five years.
An upfront acquisition cost of US$9 million was paid to the State upon signature of the Nkembe PSC. The acquisition cost reflects the value of this acreage and maturity of the Gabon Basin as an oil province, as well as the cost of acquiring existing well and seismic data over the Nkembe block. Pura Vida believes the proposed work program (described below) will prove the potential of the multiple play types in the Nkembe block leading to the identification of multiple drilling targets.
Press Release, January 15, 2013