TR-saAlgoa-Gamtoos Block (50% interest)

Operator: New Age Energy Algoa (Pty) Ltd (50% interest)

Licence Size: 9,369km²

1st Renewal Period (2 Years)

Through its wholly-owned subsidiary, Rift Petroleum Limited, Tower Resources holds a 50% interest in the Algoa-Gamtoos licence, offshore South Africa. Tower acquired its non-operated interest in the Algoa-Gamtoos licence through the all share acquisition of Rift in April 2014.

Overview

The Algoa-Gamtoos licence covers 9,369 km² and is operated by New Age Energy Algoa (Pty) Ltd (“New Age”) (50%). This acreage straddles the Algoa and Gamtoos basins on the shelf, as well as outboard slope edge of the South Outeniqua Basin.

Recent geological evaluations have shown that the true hydrocarbon prospectivity of the basins covered by the Licence area has been largely unexplored by the drill bit. All but one of the historical wells in the area were drilled over 25 years ago, and all were located using sparse 2D seismic data and either failed to intersect valid closure and/or encountered only modestly developed reservoir sands where drilled on the fringes of the Algoa and Gamtoos basins. Many of these old wells, however, either encountered shows, residual hydrocarbons and/or penetrated stacked wet gas to oil-prone shale source sequences. Basin modelling confirms three new stratigraphic and part structural-strat plays being targeted following the Operator New Age’s recent work, comprising:

  • Syn-Rift Play in the Gamtoos Basin (in the west of the acreage)
  • Post Rift Canyon Play in the Algoa Basin (to the east of the acreage)
  • Post Rift S.Outeniqua Basin Slope Margin Play (in the south-west of the acreage in deeper water)

Further 3D seismic-led exploration is now planned, to map more accurately and unlock a number of newly defined leads on existing 2D and 3D seismic data. Of these, the five primary leads alone are estimated capable of containing a combined block-wide STOIIP of 1.4+ Billion bbls (and an upside of over 2 Billion bbls STOIIP), with a mean prospective resource potential in excess of 500 Million bbls (recoverable) and a significantly bigger upside, which the new 3D is expected to better quantify.

A farm-out process has commenced to seek a partner for a material share of the licence working interest in return for funding the 3D seismic survey planned for the most prospective parts of the licence, and this process is being managed by ENVOI Limited.

Algoa-Gamtoos Licence History

New Age was originally awarded the Licence as part of a larger Block in May 2009 under a one-year Technical Cooperation Permit (TCP), which was then converted to a three-year Initial Exploration Period in 2011. New Age then reprocessed some of the existing 2D seismic ahead of acquiring an additional 1,787 km of new 2D data. This was followed by Rift Petroleum’s farm-in, shortly before its acquisition by Tower, and the acquisition of 658 km2 of 3D seismic over part of the Algoa Basin, fulfilling the work commitment of the Initial Exploration Period to December 2014. The approval to progress into the First two-year Renewal Period was awarded in December 2017.

The Algoa-Gamtoos Licence area itself has seen several phases of previous exploration resulting in coverage by various vintages of seismic data ranging back to 1975, and 20 wells. Soekor drilled 18 of these wells in the 1970s and 80s, and many of them encountered shows. However the new analysis clearly indicates most were drilled on the basin margins, while many are also now seen as having been located off structure on the old 2D seismic data. This data is now deemed inadequate to map drillable prospects accurately and to unlock the new and undrilled internal basin slope and canyon play potential where New Age and Tower are now focusing their attention, particularly in the Gamtoos Basin.

Regional setting and Petroleum Geology

The Algoa and Gamtoos Basins are positioned at the eastern end of a series of en-echelon petroleum basins on the southern margin of South Africa which developed during the Jurassic break-up that separated southern Africa from the Falklands Plateau of South America. The regions subsequent split and prospective syn-rift phase and two subsequent phases of the post-rift (‘Drift’) phases of tectonic and stratigraphic evolution were responsible for the main hydrocarbon plays now being targeted. These Phases of evolution and their petroleum geologies can be summarised as follows:

  • Syn-rift Phase (Middle Jurassic – Middle Lower Cretaceous): Over 1,000 metres of organically rich shales are mapped in the syn-rift sequence of the Valanginian to Hauterivian interval. Burial history and temperature profile predict that peak oil generation and expulsion of hydrocarbons was most likely early Cretaceous and indicate these shales are still in the oil generation window to the present day.
  • Post-rift (‘Drift’) Phase (Middle Lower Cretaceous – Present): The Lower Cretaceous (Barremian) turbidite channel and fan sands are now primary targets in the area, which locally dominated the early ‘Drift’ deposition within what was an active transform phase of post-rift. Analogous Barremian play deposits transported from the northwest are already proven in the producing fields in the southern part of the Bredasdorp Sub-Basin.

These targets are contained and sealed within some 2,000 metres of Cretaceous sediments deposited during a period of relatively high subsidence and sedimentation rates that filled the Algoa and Gamtoos sub-basin areas. This is characterised by mostly marine shelf deposition and erosion. Region-wide Aptian organic-rich shales of both marine and terrigenous origin, largely Type II with a Type I component, have been documented in the Outeniqua and particularly in the Bredasdorp Basin, where it has been found over 200 metres thick.

Prospectivity

The mapping and interpretation to date has been reliant on the existing 2D data, which covers the Gamtoos Basin and South Outeniqua Basin slope, and the existing 3D, which covers the northern part of the Algoa Basin area.

Although a number of play concepts have been tested by the historical wells, only one was drilled within the last 25 years and none were located using 3D seismic. These wells have nevertheless been instrumental in the new work and a revised understanding of both the basin geology and also the untested play potential now being defined within the grabens. As a result, five new undrilled leads have been identified, mostly on the existing 2D data, targeting the new play potential. To date, none of the ‘bright’ amplitude events mapped in either the Algoa or Gamtoos Basins have been tested by the historical wells and the existing seismic coverage is too poor or sparse, particularly in the Gamtoos Basin, for full interpretation. This is why the Operator is now seeking new 3D data.

On 7 February 2019 Total reported a significant gas condensate discovery in Block 11B/12B, located in the Outeniqua basin, offshore South Africa. The well was drilled to a total depth of 3,633 metres and encountered 57 metres of net pay in Lower Cretaceous reservoirs, and with this discovery opens a new world class gas and oil play. Total have stated that they believe the new discovery could hold between 500 million to over one billion barrels of oil equivalent and they now intend to drill several further exploration wells on Block 11B/12B to test additional prospects.

Block 11B/12B is located adjacent to the Algoa-Gamtoos licence and the Algoa-Gamtoos block also contains the southern deepwater basin margin of the Outeniqua Basin that was targeted by Total’s Brulpadda well and is approximately 150 kms along strike to the east from the Brulpadda discovery.

Importantly, the Brulpadda well has successfully tested the Lower Cretaceous turbidite fan play of the Outeniqua basin slope, which is interpreted to extend along strike into the southern part of the Algoa-Gamtoos block, in which the Operator, New Age, has identified on 2D seismic a substantial prospect.

The Operator has assessed analogue prospect potential on the Algoa-Gamtoos block at 364 million boe on an unrisked basis from 2D reprocessed data, which is an increase on its previous 2018 estimate. Envoi, on behalf of the Operator, New Age and Tower have been contracted to facilitate a farm-out of equity in the licence, and a data room is currently open.

The updated (unaudited) prospective resources estimate, prepared to the SPE resource classification standard by the Operator for the five primary new prospects/leads identified during that process, is summarised on an unrisked volumetric basis in the table below.

Prospect/Lead Basin Targets/Play Mean Prospective Resources (unrisked)
(MMboe Recoverable)
Roan Gamtoos Syn-Rift Basin Floor Strat trap 119
Reedbuck Gamtoos 67
Steenbok Gamtoos 34
Canyon Algoa: Uitenhage Post-Rift Canyon fill 80
Deep Albian Outeniqua Basin Slope Post-Rift Canyon fed basin slope 364
  664

Work Programme

A new 3D seismic survey is planned, with a view to completion by the end of 2019 unless deferred into the next Renewal Phase of the license, covering the most prospective area of the Gamtoos basin. This would be the 2nd of three two-year renewals requiring additional work commitments involving seismic and, ultimately, a well in the 3rd Renewal Period.