Swala Energy Limited (Swala) is pleased to announce that RISC Operations Pty Ltd (RISC), an independent petroleum advisory firm, have completed their review of the resource potential of the Kito (‘Jewel’ in Swahili) prospect in the Kilombero Basin, located within the Kilosa-Kilombero licence in southern Tanzania. Swala has an indirect 32.5% interest in the licence. Net unrisked prospective resources allocated to the Swala indirect interest range from 12.5 million stock tank barrels (mmstb)(P90) to 110.5 mmstb (P10).
The Kito prospect was identified from the results of the recently-completed seismic survey that Swala Oil & Gas (Tanzania) Limited (SOGTL) and its joint venture partner, Otto Energy (Tanzania) Pty Ltd (Otto) carried out over a 20km section of the 80km-long Kilombero Basin, as announced on the 8th November 2013. Kito is sufficiently large to have been intersected by a sufficient number of seismic lines to enable a resource assessment to be performed.
The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.
The estimates of prospective resources have been calculated using a probabilistic method with ranges of each input parameter, for each of two potential reservoir levels – Yellow (shallow) and Blue (deep). The total resources have been derived by arithmetic addition of these two levels, assuming significant dependency.
The quoted estimates of prospective resources are unrisked. The prospect carries a chance of discovery in the range 8% (Yellow) to 9% (Blue), which reflect a combination of play and prospect risks. An additional chance of development would apply in the event of success.
Under the terms of the Petroleum Sharing Agreement between SOGTL, the Tanzanian Petroleum Development Corporation (TPDC), and the Government of Tanzania, the joint venture part obliged to carry out in 2014 either another 2D seismic survey totalling 500 line kilometres or to drill one well. The joint venture is in the process of discussing with TPDC the possibility of focussing its 2014 activities over the Kito area with the aim of fast-tracking the prospect to the drilling phase.
As previously reported, initial results also suggest the presence of a thick, Neogene-age basin with a maximum depth to basement in excess of 3,000m. The age of the sediments recorded (based on low seismic velocities) appears to be similar to that of sediments observed in the now proven oil basins of Lokichar (Kenya), and Lake Albert (Uganda), where Africa Oil and Tullow Oil have had significant success. The Kilombero Basin is approximately 100km long and about 20km wide and is comparable in length to the Lokichar Basin in Kenya (approximately 150km long and 25-30km wide). The 2014 work programme intends to add to the joint venture’s understanding of the unexplored portions of the basin, where additional prospectivity against the basin bounding fault is expected.
Dr. David Mestres Ridge (CEO) said, “We are very pleased with the fact that the seismic work in Kilombero identified such a significant structure as Kito. We are also encouraged by the fact that, with only one quarter of the basin surveyed, additional leads that were not addressed in RISC’s assessment, there remains considerable potential within the Kilombero basin that the joint venture will commence addressing in the coming year.”
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