Afren Acquires Interest in Tanga Block from Petrodel

Source: www.gulfoilandgas.com 3/24/2011, Location: Africa

Afren plc announces the acquisition of a 74 per cent operated working interest in the Tanga Block, located onshore and offshore Tanzania, from Petrodel Resources Limited.

Highlights

- Tanga Block lies south of and is contiguous with Afren's operated blocks L17/L18 in Kenya - southerly extension of the same coastal high and basin trough plays

- New country entry into Tanzania. Represents a complementary extension of Afren's existing East African platform

- Opportunity to leverage regional expertise and knowledge

- Large scale potential with significant prospects and leads identified

- Oil shows from previous wells and oil seeps on nearby Pemba Island attest to a working hydrocarbon system being present (oil prone)

- Forward work programme that includes 900km of shallow and deep water seismic and the potential to drill one exploration well in Q4 2011 is underway

Background

Afren announces that it has acquired a 74 per cent operated working interest in the Tanga Block, located offshore Tanzania, from Petrodel who will retain a 26 per cent interest in the block. In consideration for the acquisition of the interest, Afren has agreed to reimburse Petrodel a percentage of the back costs in relation to the block. Afren will also fund all costs associated with the acquisition, processing and interpretation of an agreed seismic survey over the block amounting to 900 km of shallow and deeper water 2D coverage, after which, when supported by the seismic, Afren will carry Petrodel through the drilling of one shallow water exploration well subject to a cumulative cap on gross costs of US$40 million.

The Tanga Block lies northernmost coastal Tanzania, directly south of and adjoining Kenyan blocks L17 and L18 in which Afren holds a 100 per cent interest. The licence includes onshore, shallow marine and deep marine areas. The block is covered by 200 km of legacy 2D seismic data, and 1,200 km of good quality new 2D seismic data covering mainly the deeper water area, which was acquired by Petrodel. The Tanga Block is well located as it includes a deep basin with a very thick sedimentary section that has the potential to host several source rock intervals and reservoir/seal pairings. Potential petroleum plays recognised to date are Lower Cretaceous sands deposited in deltaic to shallow marine environments, Upper Cretaceous submarine fans, Eocene shelf sands and Miocene fluvial and deltaic sands. There are structures, particularly along the western flank of the basin, which are interpreted to form viable traps. Some of these lie in shallow water and could present relatively inexpensive drilling targets.

The Tanga block is also a possible source of charge into the southern parts of adjacent Kenya block L18. Oil seeps and shows encountered in previous wells drilled on the nearby Pemba Island attest to the oil potential of the block and surrounding area.

The prospects advanced to date have been defined on the existing 2D seismic grid as follows:
Orpheus Prospect with 347 mmbbls of gross prospective oil resources, Calliope/Euripides Prospect with 523 mmbbls of gross prospective oil resources, and Hercules Prospect with 517 mmbbls of gross prospective oil resources.

Osman Shahenshah, Chief Executive of Afren plc commented:

"We are pleased to announce a farm-in to Petrodel's Tanga Block. The acquisition of an interest in the Tanga Block further consolidates our significant East African exploration exposure. The block represents an attractive opportunity to leverage our in-house knowledge and further explore along the same geological trends as blocks L17 and L18 that lie immediately to the north in Kenya, where Afren has a 100 per cent. operated interest."


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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