Tower Resources plc (the “Company” or “Tower” (TRP.L, TRP LN)), the AIM-listed Africa-focussed oil and gas exploration company, notes the announcement dated 8 October 2014 from the Operator, Taipan Resources Inc. ((“Taipan”) (TSX-V: TPN)), regarding the signing of a Letter of Intent with the Greatwall Drilling Company of China to contract the GW-190 land rig for the planned Badada-1 well (Tower 15% working interest) onshore Block-2B, Kenya. The Badada-1 well is expected to spud between mid-December 2014 and mid-January 2015 and is expected to take approximately 70 days to drill.
The Badada-1 well is a potential play-opener. It will test the first of several prospects and leads in Block-2B that are potentially analogous to prospects in the Lokichar Basin where Tullow Oil and Africa Oil have enjoyed multiple oil discoveries in the Tertiary Rift sequence. The well is planned to be drilled to a total depth of between 3,000 and 4,500 metres to test primary Tertiary age reservoirs and, dependent upon results, secondary upper Cretaceous age reservoirs.
Tower’s management estimate gross unrisked prospective resources for this well range from 402mmboe (P10) to 16mmboe (P90) with a Pmean of 169mmboe. This compares to Taipan’s estimate of gross mean unrisked prospective resources of 251mmboe (Source: Sproule International Limited (“Sproule”) February 2014). Tower’s management believe this difference reflects a more conservative approach to the extent of the Badada structure, but also recognise there is considerable upside potential in Block-2B, both in terms of additional zones within the Badada prospect and the possible extent of the trap as well as in the multiple follow-on prospects and leads in the block.
If the Badada-1 well is successful it will de-risk many other prospects and leads within Block-2B and provide important information about the detailed geological evolution of the Anza Basin to aid future exploration. The follow-on exploration potential of just the four prospects and leads immediately adjacent to the Badada prospect is estimated to be an additional 405mmboe of gross mean unrisked prospective resources by Taipan, with a range from 890mmboe (P10) to 104mmboe (P90) as verified by Sproule. A total of nineteen prospects and leads have been identified in the block so far with total estimated gross mean unrisked prospective resources of 1,593mmboe reported by Sproule. Tower is currently updating its own view on the potential upside in the Block and will provide further guidance once this work is complete.
Preparations at the well site are already underway with a number of auxiliary services and long-lead items already contracted. Gross well costs remain estimated at US$20 to US$25 million (US$3.0 to US$3.75 million net to Tower). The Company will provide a further update upon the formal contracting of the GW-190 rig and mobilisation to the Badada-1 drill site and other operational progress in due course.
Graeme Thomson, CEO, commented “We are very excited by the upside potential in Block-2B and whilst this is a frontier well, if it succeeds then there is scope for repeating the success several times over. There are already a large number of leads mapped and additional seismic in 2015 could delineate these so that an aggressive exploration programme can follow in 2016/17”.
Graeme Thomson (CEO)
Nigel Quinton (Head of Exploration)
Andrew Matharu (VP – Corporate Affairs)
+44 20 7253 6639
Peel Hunt LLP (Nominated Adviser and Joint Broker)
Richard Crichton/Charles Batten
+44 20 7418 8900
GMP Securities Europe LLP (Joint Broker)
Rob Collins/Liz Williamson
+44 20 7647 2800
Chris McMahon/Peter Reilly
+44 20 7016 9572
In accordance with the guidelines for the AIM market of the London Stock Exchange, Nigel Quinton, BA, MA, FGS, Head of Exploration for Tower Resources plc, who has over 30 years’ experience in the oil & gas industry, is the qualified person that has reviewed and approved the assessment of the Company’s estimate of the resource potential set out above.
Download press release [PDF]