Petroleum Africa
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Wednesday, August 29, 2018
ADX Energy updated the progress made in relation to the independent evaluation of the resource potential and viability of the Dougga Gas Condensate Project offshore Tunisia. The company is also making progress in the plans to drill the Dougga Sud appraisal well and the funding for its appraisal program and permit renewal terms.
On July 16 ADX revealed the assessment of the Contingent Resources at Dougga as well as the Prospective Resources of the Dougga South West prospect determined in the Independent Evaluation Report prepared by ERC Equipoise (ERCE). In addition to the Dougga resource assessments previously announced, ERCE has assessed that chance of the development of Dougga to be 70%.
Noble Drilling Services Inc has advised that the Noble Globe Trotter II drilling rig is now scheduled to be available to spud the Dougga Sud appraisal well in April 2019 following completion of its current program in the Black Sea. Noble have extended the drilling contract on the same commercial terms as agreed previously. Well planning and approvals for drilling and testing are ongoing. The delay provides additional time for ADX to secure funding and secure long lead items for the Dougga Sud well.
Data room due diligence and funding discussions are ongoing with multiple parties with a view to securing either a farmout, vendor finance or a combination of both. The recently completed ERCE report, in combination with the TechnipFMC Concept Study, provides potential funding partners with independent confirmation of the potential viability of the Dougga Gas Condensate Project by highly respected third parties. ADX continues to work towards the finalization of funding for Dougga at an asset level and the introduction of a capable partner to the project that can not only fund the appraisal well but, upon appraisal success, also enable the commercialization of Dougga.
On December 2017 ADX announced that the Director General of Hydrocarbons (DGH) advised that the Hydrocarbon Consultative Committee (HCC) had approved the application for a change of work program in the Kerkouane permit from an exploration well and the acquisition of 500 sqkm of 3D seismic to the drilling and testing of the Dougga Sud appraisal well. The revised work program, which replaces the previously unfulfilled permit work program during the first renewal period, is a precondition to the entry for a second renewal period of three years.
The DGH also advised the requirement for a bank guarantee in relation to the modification of the work program, which will be lifted upon the testing of the Dougga Sud well. Following discussions between the DGH and ADX, the DGH has advised that the HCC has agreed to reduce the proposed bank guarantee for the completion of the Kerkouane testing program from $8 million to $3 million and delayed its timing to the spudding of the well. This is a significant concession by the HCC facilitated by the DGH. ADX intends to secure the funding from potential farminees or providers of vendor finance.
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