Operations
Namibia project
Independent evaluation
Oilfield International Consultants (OIL) has completed work on behalf of Tower to review work undertaken by the Operator. The objective was to give an independent opinion of the reserve potential of the identified prospects and the chance of achieving exploration success. They also completed development and economic evaluation studies to provide a basis for estimating a risked valuation of the Tower interest. The results of this work were very encouraging and it was extended into a comprehensive Competent Persons study and a report (CPR) was published in early July 2010. On completion of the 3-D seismic interpretation the CPR was updated to incorporate this significantly enlarged data and was published in June 2011.
The assessment by OIL was undertaken in compliance with the SPE Petroleum Resources Management System (SPE-PRMS). OIL confirmed the main structural features as Delta (at two separate levels, Maastrichtian and Palaeocene) and Alpha and Gamma (at the Palaeocene level only) but, also, some significant, high risk resource potential in stratigraphic features between the main 4-way dip closed anticlines. The main conclusions were as follows:
- The Delta structure at Maastrichtian level ("DeltaM") and Palaeocene level ("DeltaP") are now both classified as prospects, which, in a technical sense, means they are suitable to drill without further information – the Delta structures at Campanian (two separate horizons) and Albian levels and the Gamma and Alpha structures at Palaeocene level are all classified as leads, which require further information to raise them to prospect level.
- OIL has used the seismic data, the two Namibian discoveries and regional data to evaluate the likelihood that the reservoirs would be predominantly light oil-bearing with a possible gas cap; gas condensate-bearing; or dry gas-bearing. For Delta, OIL concludes probabilities of 50%, 40%; and 10% respectively. All other structures are rated 45%, 44%, 11% respectively.
- Prospective resources for the prospect and leads at the 50% probability level have been estimated as follows:
- In the event of light oil, gross recoverable resources amount to 12.28 billion barrels and 19.2 trillion scft of natural gas. Net figures for Tower are 1.75 billion barrels and 2.7 trillion scft of natural gas.
- In the event of gas condensate, gross resources amount to 1,533 million barrels and 45.0 trillion scft of natural gas. Net figures for Tower are 218 million barrels and 6.4 trillion scft natural gas.
- In the event of dry gas, gross resources amount to 107 million barrels and 45.2 trillion scft natural gas. Net figures for Tower are 15 million barrels and 6.4 trillion scft natural gas.
- The final step has been to estimate a geological chance of success ("COS") for each structure. This has made use of all basic technical information but also an intensive review of the AVO data, in particular interpretations prepared by consultants to Arcadia. In respect of the two prospects, DeltaM has been assessed as having a 40% COS and DeltaP a 24% COS. An economic confidence factor of about 79% was then applied for the two prospects to the geological COS's to calculate the economic COS used in the EMV calculations.
OIL has estimated that the net risked prospective resource attributable to Tower's 15% working interest of Namibia Licence 0010 is 270 million barrels of oil equivalent. Scoping development studies have also been completed and these are summarised in the CPR released on 30th June 2011.
Arcadia, operator of the Licence, who is obliged to carry Tower's 15% share of the cost of the first well, is well advanced with a programme to attract farmin offers from third parties. This is consistent with a target to drill a well early in the second quarter of 2012.
