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Thursday, February 19, 2015
ERHC Energy continues to progress its assets across Africa, specifically in Kenya, Chad, and STP.
In Kenya on Block 11A, where the company is partnered with Cepsa, the exploration team is making steady progress toward drilling during the current First Additional Phase of exploration. 2D seismic mapping has been completed and to date over a dozen structural prospects and leads have been identified and supported. The parties’ technical team is calculating volumetrics for identified prospects and leads in the block, which will help determine the location of the first well.
ERHC said that the 2015 work program includes securing the requisite drilling rig, determining the location for drilling the first exploration well, completing an Environmental Impact Assessment for the drilling location and developing the well design. The work program is underway with long lead items for well operations already tendered. Drilling of the first exploration well is expected during Q1 2016, if all conditions precedent are met.
The company currently holds a 35% interest and is working with Deloitte Corporate Finance (DCF) on a further farm down of its stake in Block 11A.
In Chad on Block BDS 2008,ERHC’s exploration team has commenced planning toward 2D seismic acquisition. The information gathered through an airborne gravity/magnetic survey of the Block in Southern Chad proved to be a significant improvement on prior data. ERHC’s sub-contractor, Bridgeporth, a specialist geosciences company, completed the survey during the Q4 2014, confirming the preliminary leads and revealing additional targets.
ERHC said the interpretation of the survey confirmed the graben edge in the southwest portion of the survey.Two regional lines were recorded to the east in a north-south orientation, which suggest the possibility that there may be a previously unrecognized rift basin in the north east portion of BDS 2008. The company went on to report that in general the aerogravity and magnetic data showed three dominant trends; east-west associated with the Doseo, Doba, and Bongorgrabens and a conjugate set of fabric oriented NE-SW and NNW-SSE.The time structure map at the top Lower Cretaceous objective extends into BDS 2008 giving rise to the faulted Leads A and B with maximum closure areas of 44,000 and 15,600 acres respectively.
Based on the survey, total PIIP for Focus Area 2 alone in a best case scenario has been estimated at 278 million barrels (with a high case of 876 million barrels). It is expected that estimates for ERHC’s two focus areas might be even further enhanced by seismic work, the next activity in the work program.
Like with its other assets, ERHC is looking to farm out a stake in the BDS 2008 in order to lessen its risk exposure. ERHC continues to explore a farm-out to spread risk.
In STP’s EEZ the company is currently working with the National Petroleum Agency of Sao Tome and Principe (ANP-STP) to complete the budget for the first year of its exploration work program. Concurrently, the company continues to review the viability of its two offshore Blocks in the EEZ, particularly given the prevalent downturn in global oil prices.
As shareholders are probably aware, the drop in oil prices has tempered the enthusiasm among international operating companies for deep offshore exploration, especially in frontier areas. It continues to hold discussions with prospective partners, including an IOC to whom ERHC in December granted first right of refusal for a farm-out for a period of six months.
A preliminary examination of available 2D seismic data indicates the possibility of commercially sizeable Cretaceous deep water tubidite fan existing in Block 11. While further investigation is in process, ERHC’s exploration team believes it has the potential for holding enormous hydrocarbon resources.
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