Tower Resources plc reported that good progress has been made with operational planning in Uganda and detailed technical evaluation work for Namibia. These assets were acquired by Tower in a merger with Neptune Petroleum Limited approved by shareholders on 16 January, 2006.
In Uganda, a Land Satellite Imaging survey and a geological field survey are currently underway to investigate the presence or otherwise of surface oil seeps. The presence of seeps would confirm that oil has been generated under Block 5; however the lack of seeps would not significantly reduce the prospectivity of the Licence. A contract has been signed with IMC Geophysical International Limited under which they will acquire 250 kilometres of seismic data. This operation is estimated to begin in July. The intention is to complete the interpretation of this data and to begin drilling a well early in 2008, planning for which will begin soon.
Other operators in Licences to the south of Block 5 have continued to have success. Tullow, now 100% owner of Block 2, has confirmed two discoveries and Heritage, Block 3A, has encountered productive oil reservoirs at two depth levels in Kingfisher-1. The latter well is still drilling to evaluate a large structure in the deeper area of their basin. Tullow, northern Block 2, and Heritage, Block 1, both have plans to extend their seismic coverage towards the southern boundary of Block 5. Tullow have announced plans for a significant exploration and appraisal well programme in Block 2, including wells in the north of the Licence. These programmes, when added to Tower’s own activities, will amount to a significant assessment of the potential of the Albertine Graben. This will increase the likelihood of proving up sufficient oil reserves to support a pipeline from the operational areas. It also means that there will be regular news flow, throughout 2007, as exploration in Uganda proceeds.
In Namibia, a geochemical study to assess source rock maturity and a sea surface oil seeps survey by satellite imaging, were completed. The geochemical assessment has confirmed that three out of four potential source rocks are likely to be mature with significant areas at peak maturity. The seep study has indicated the possible presence of natural liquid hydrocarbons slicks at surface, to the south and east of the Dolphin Graben (the deepest sedimentary sequence in the Licence).
It was decided to investigate specific aspects of interest arising from the initial evaluation programme in more detail by undertaking reprocessing and AVO analysis of six selected seismic lines. This detailed assessment was designed to improve the interpretation of gas indications in prospective structures. These analyses have highlighted the potential for commercial gas reserves in the northern part of the Licence, particularly in a very large structure to the west of, but adjacent to the deepest “kitchen” area of the Dolphin Graben. The immediate exploration programme, including a 2-D seismic survey later this year, will be directed at investigating the potential of this structure.
