Continental Focus, International Reach

SacOil Updates DRC and Nigeria Activities

Tuesday, November 12, 2013

SacOil saw an airborne gravity and magnetic survey conducted over the northern part of Block III in the Democratic Republic of Congo (DRC). The acreage is outside the Virunga National Park. The company said that the interpretation of the survey, acquired by the operator Total, confirms the geological trend observed in the adjacent concessions in Uganda. Features similar to those found to be oil-bearing in Uganda in the Albertine Graben have been observed and identified with the new data.

With this positive geological information, planning for the acquisition of a 2D seismic survey has begun. The current design envisages the acquisition of a minimum of 400 km of 2D seismic data.

There has been a delay of approximately six months to the planned work program, as a result of civil unrest to the south of the area of activity. With the situation on the ground now stabilized, it is anticipated that the seismic acquisition will take place within the next dry season in Q1 2014.

In Nigeria on OPL 233 the company saw the work program and work program budget approved by National Petroleum Investment Management Services (NAPIMS). Following the approval, the JV partners reworked the existing seismic data on OPL 233, and incorporated further data on the southwestern portion of the concession, providing an integrated geological understanding of the acreage and the region.

While there are still uncertainties in the current data due to the dated vintage, poor quality and uncertain navigation parameters, the JV partners remain optimistic on the contingent resources and potential upside. In addition, the JV partners have identified a number of additional prospective leads for subsequent investigation and possible drilling.

In preparation for the 3D Ocean Bottom Cable (OBC) seismic survey over OPL 233, a contract was awarded for an Environmental Impact Assessment (EIA) to Tidalflow Nigeria. Tidalflow has already completed the wet season sampling on schedule and will undertake the sampling for the dry season during November. SacOil also revealed that three companies were invited to tender for the contract to conduct the survey to acquire 3D OBC seismic data. The JV partners have completed the evaluation processes with respect to the technical and commercial bids, along with the representative from NAPIMS. Requisite site visits were carried out to do a physical evaluation of equipment tendered by the bidders. The contract was subsequently awarded to Geomarine, and discussions towards the finalization and mobilization of the OBC seismic survey are underway. Tenders were also issued for the data processing of the 3D OBC seismic survey. The tenders have been evaluated and a preferred contractor has been identified with award process to be finalized within the next couple weeks.

Further to an invitation to tender to qualified companies for a geohazard survey over OPL 233, involving surveying the OPL 233 seafloor with sidescan sonar apparatus, a preferred contractor has been selected and discussions towards the finalization of the contract and mobilization to site are underway.

Similar to OPL 233, SacOil has performed a technical review of the borehole and 3D seismic data on OPL 281. Management is satisfied that, despite some uncertainties in the data, the current estimate of contingent resources as reported by AGR TRACS, may be conservative and the company believes that with further evaluation the resources may actually be more substantial than initially anticipated. The potential increase in resources can be attributed to several deeper channel leads and prospects, which holds a possibility of adding to the prospective resources of OPL 281.