Tower Resources

Namibia Project

Offshore Namibia — Blocks 1910, 1911a and 2011a

Neptune Petroleum Limited has licensed three blocks lying over the southern flanks of the Walvis Ridge (see Figure 1). The licences had an initial exploration period of two years, now extended to four years, with a minimum expenditure of $1.15 million.

 Figure 1: Namibian Licence blocks

This area of the Namibian Offshore has been the scene of previous exploration interest back in the early-mid 1990’s.

Norsk Hydro drilled two wells (1911/15-1 and 1911/10-1) in the area in January 1994 and June 1995 respectively. The wells were drilled following an exploration prospectivity report prepared by Norsk Hydro in late 1990 (the “Norsk Hydro Report”). The report “confirmed extensive rift basins along the Namibian coast indicating good potential for traps and source rocks, and interesting reservoir configurations at different stratigraphic positions in the northern part of offshore Namibia”.

Both wells were plugged and abandoned as dry holes having reached total depth in several hundred metres of volcanics thought to be of Aptian or possibly Barremian age. However neither well was drilled through the volcanics to the underlying mid to late Jurassic syn-rift sequence, which shows some clear half-graben structures and significant accommodation space for deposition of sediments.

Notwithstanding the lack of success, the presence of three potential source horizons were established and a number of potential reservoir horizons were identified.

Neptune Operations

Neptune, as a first step, completed the interpretation of 10,000 kms of bought seismic data covering the Licence area; undertook a comprehensive geochemical study; and contracted a sea surface oil seep survey. The outcome of these assessments gave considerable encouragement that there would be: multiple structures; maturity of hydrocarbon source sediments; presence of hydrocarbon indications; and presence of sealed reservoirs. As a consequence, several seismic lines were reprocessed and reinterpreted using Amplitude Variation Offset (AVO) analysis to improve the assessment of hydrocarbon indications.

The AVO work revealed strong indications of natural gas in the northern area of the Licence, some coincident with commercial scale structures. Also, importantly, the analysis confirmed that there should not be gas present at the locations of the two unsuccessful wells.

A 2-D seismic survey was completed in the third quarter of 2007 - processing and interpretation of the data is close to completion but results to date are confirming the significant potential of the Licence. Seismic operations began on 25th August 2007 and 735 kms of 2-D seismic data were recorded in the period to 2nd September 2007. The prime area of focus was in the north west of the Licence where interpretation of bought seismic data had revealed giant structures with indications of hydrocarbons in deep water (up to 1500 metres). 

On 20th September 2007 the Minister of Mines and Energy of the Republic of Namibia approved the farmout of an 85% interest in Tower's Licence, covering offshore blocks 1910A, 1911 and 2011A, to Arcadia Petroleum Limited (Arcadia). 

The Minister also approved the transfer of the Operatorship of the Licence to Arcadia.

• shooting and interpreting the recently completed 2-Dimensional seismic programme;
• recording and interpreting a 3-Dimensional seismic programme, presently contemplated in early 2008;
• an exploration commitment well;
• a second well which might be an appraisal well or a second exploration well.

Arcadia has the option to withdraw from its commitment at the end of each of these four stages of operation or to assign all or part of its interest to a third party agreeing to meet the funding commitment. In the case of withdrawal or failure to assign, the full 85% interest will revert to Neptune. Arcadia has also reimbursed 85% of certain historic costs to Tower.