Global Petroleum Limited updates the proposed farm down of the Company's 85% participating interest in Petroleum Exploration Licence No. 0029 ("the Licence") covering Offshore Blocks 1910B and 2010A in Namibia. The blocks are located in the Walvis Basin, cover 11,730 square kilometres and are in water depths ranging from 1,200 to 3,000 metres. They lie adjacent to acreage held by Repsol and its partners where an exploration well is scheduled to be drilled in the first quarter of 2014.
Global has awarded a mandate to FirstEnergy Capital LLP ("FirstEnergy"), the Company's Joint Broker, to bring in a partner to fund the next phase of planned exploration expenditures on the Licence, commencing with 3D seismic. FirstEnergy has considerable experience in transactions of this nature.
Exploration drilling results in Namibia have been mixed to date but the HRT operated Wingat well in May 2013 drilled in the Walvis Basin unambiguously established the presence of a major source rock in the Basin. Wingat was the first of HRT's three well drilling campaign in Namibia which completed in September. It seems clear that the industry was awaiting this completion and is now refocusing once again on farm in opportunities. Technical work undertaken by Global in the last 18 months based on 2D seismic data suggests that the most interesting plays in the Licence are Cretaceous deepwater sandstones in structural or stratigraphic traps and carbonate platform build-ups on large horst blocks. Both reservoirs would be sourced either from the south and the Wingat source kitchen or locally, from syn-rift source rocks within deep rift grabens identified within the Licence.
The key terms of the Licence are:
(a) Initial Exploration Period (first four years of the Licence commencing on 3rd December 2010): undertake geological, geochemical, geophysical and related studies and review all existing gravity and magnetic data, and other available information, including the purchase of existing relevant and reasonable quality seismic data and acquire, process and interpret a minimum of 1,000 kilometres of 2D seismic data. Minimum exploration expenditure for the Initial Exploration Period is US$1 million.
(b) First Renewal of Exploration Period (two years from 3rd December 2014): the drilling of one exploration well. Minimum exploration expenditure for the First Renewal Exploration Period is US$20 million.
(c) Second Renewal Period (two years from 3rd December 2016): acquisition, processing and interpretation of additional seismic data (if necessary) and the drilling of one exploration well. Minimum exploration expenditure for the Second Renewal Exploration Period is US$20 million, or US$21 million if new seismic is required.
The Company is continuing to pursue diversification opportunities. Over the last 12 months, Global has studied, in depth, a number of potential transactions. These have included corporate acquisition, farm-ins and licence applications. The Company remains confident of making an acquisition on terms that the Board considers acceptable to shareholders.
Commenting, Peter Hill, Global's Managing Director and CEO, said: "We remain excited about our Namibian acreage but wish, as previously announced, to diversify risk and bringing in a partner through farming down our 85% interest in the blocks is an obvious step to take. FirstEnergy's track record and extensive contacts internationally mean the firm is well placed to deliver this objective."
Review by Qualified Person
Chris Lewis, the Company's Exploration Manager, has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person under the AIM Rules. Chris Lewis has 20 years of oil and gas experience and has held senior executive positions managing E&P operations in Africa and Europe with a particular expertise in basin evaluation and prospect generation, and exploration and subsurface management. He holds a BSc in Physics from Imperial College, London.
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