Tower Resources inks new petroleum agreement in Namibia
London-based oil and gas company Tower Resources has signed a new petroleum agreement with the Government of Namibia covering an 80% operated interest in blocks 1910A, 1911 and 1912B, offshore Namibia.
The agreement was signed by Tower Resources’ subsidiary, Tower Resources (Namibia) Limited, together with the National Petroleum Corporation of Namibia (Namcor) (10%) and ZM Fourteen Investment CC (10%).
Tower said on Wednesday that these three blocks – 1910A, 1911 and 1912B – cover 23,297 km2 in the Walvis Basin and Dolphin Graben.
Tower has had a long-standing application with the Namibian Ministry of Mines and Energy (MME) and has been working to conclude the petroleum agreement.
The terms of the agreement have now been agreed with the MME and signed by all parties. Tower noted that issuance of the license remains dependent on the finalization of a Joint Operating Agreement (JOA) among Tower Resources (Namibia) Limited (80%, Operator), its carried interest partner Namcor (10%) and its local partner ZM Fourteen Investment CC (10%), and completion of other ancillary documentation.
Tower said that this is an under-explored region in which recent drilling results have proven the presence of a working oil-prone petroleum system and good quality turbidite and carbonate reservoirs. This is also an area that Tower knows well since blocks 1910A and 1911 formed part of Tower’s original license PEL0010, which Tower and its partners, Repsol and Arcadia Expro Namibia, relinquished in 2015.
Four-year initial exploration period
According to Tower, the petroleum agreement is structured to comprise an initial exploration period of four years, which may be extended to five in appropriate circumstances, followed by options for Tower and its partners to enter a first and second renewal period of two years each.
The work program for the initial exploration period comprises regional play fairway evaluation and acreage high-grading activities including CRS mapping, sequence stratigraphy, sedimentology and basin modelling, geochemical, gravity and magnetics analysis, 2D/3D seismic interpretation and mapping, and petrophysics and well failure analysis, based on a data base build comprising acquisition of 5,000km of existing 2D seismic and relevant well data; analysis and, if necessary, reprocessing of existing 2D data; acquisition of at least 1,000 km2 of 3D seismic data; and acquisition of oil seep satellite data and piston-coring reports.
Minimum expenditure of $5M
The minimum exploration expenditure for the initial exploration period is $5 million, which is to be supported by a bank guarantee of $0.5 million. If the company elects to enter the subsequent exploration periods, these would each comprise a single exploration well commitment and a minimum financial commitment of $20 million.
Tower said that geological evaluation has identified the presence of Albian carbonate and Upper Cretaceous and Palaeocene turbidite reservoir intervals, which has also been proven in offset wells, including Norsk Hydro’s 1911/15-1 well which encountered oil shows in the 1911 block in the 1990s. These intervals may be found in multiple structural traps across the new license area.
These include giant (1,000 km2+) 4-way dip closured structures in the west of the license and 4-way and 3-way fault dependent structural closures within the Dolphin Graben, which well results such as Wingat-1 indicate is likely to contain mature source rocks. Potential stratigraphic traps (associated with Cretaceous and Palaeogene basin floor turbidite systems) have also been identified within the new licenses.
The giant structures in the west of the license include two (Alpha and Gamma) which were similar in size and potential to the Delta structure to the south of block 1911, where Repsol, Tower and Arcadia drilled the unsuccessful Welwitschia well in 2014.
The company added that significant potential has also been identified within structural closures (50 km² to 125 km²) identified and mapped across the Dolphin Graben, all of which are located directly adjacent to source kitchens. More than eight 3-way fault dependent and 4-way dip closed structural traps have been identified so far, all of which compromise of multiple stacked targets which include Palaeogene and Cretaceous turbidites (being explored for in the southern part of the basin) as well as Albian carbonates and deeper syn-rift clastics.
In addition to the structural plays, Tower anticipates that stratigraphic plays exist within Cretaceous and Palaeogene intervals in the new license, with potential for deep-water turbidite reservoir interbedded with mature source rocks (analogous to plays being explored for by Tullow and other in the southern part of the basin). These stratigraphic plays will be worked up as part of the initial exploration period work program.
Jeremy Asher, Tower Chairman and CEO, commented: “We are very excited about our new petroleum agreement in Namibia. As a company, we know Namibia very well, and the wells drilled in the Walvis Basin during the past few years have provided a much greater level of understanding of the regional geology. As a result, Namibia and the Walvis Basin and Dolphin Graben, in particular, are now attracting great attention from well-respected explorers, both large and small, and are also once more attracting considerable farm-in interest and investment.”