One Australian energy junior could well generate some significant market interest during the remainder of 2017 on the back of a planned drilling program just off Gabon’s coast.
Earlier this year Pura Vida Energy NL confirmed it was looking to spend an estimated US$20 million on three wells in the Nkembe block, an underwater project area covering 1,210 square kilometres in the Gabon Basin some 30 km from the West African country’s shoreline.
During February the Africa-focused company, which listed on the ASX in 2012, received US$5.5 million ($7.3 million) after reaching a settlement with PXP Morocco BV, a subsidiary of US outfit Freeport-McMoRan Oil & Gas – a deal which saw the Western Australian-based explorer drop its Moroccan offshore Mazagan permit.
This followed an announcement in January that Pura Vida had entered into a conditional arrangement with a rig contractor to fund the provision of a jack-up rig to complete the anticipated back-to-back program at Nkembe later this year.
According to Pura, the first round of work will target the pre-salt Loba discovery and Loba Deep prospect, and shall include a planned drill stem test of Loba.
The location of the second and third wells will be determined by early results, and may include prospects such as Loba East, Lepidote Deep, Pompano and Palomite Deep.
Ultimately, this drilling campaign will look to yield about 100 million barrels of oil (mmbo) of which 12 mmbo is considered low risk appraisal testing of contingent (discovered) resources.
For investors, there are two reasons why Pura Vida’s Gabon play should generate some market interest – with the first being related directly to geology.
According to BR Petrobras – the largest distributor of petroleum derivatives and biofuels in Brazil and Latin America – pre-salt discoveries (which consist of sequences of sedimentary rocks formed more than 100 million years ago in the geographic space created by the separation of the ancient continent of Gondwana) have been amongst the world’s most important ones during the past decade.
“The pre-salt province comprises large accumulations of excellent quality, high commercial value light oil, a reality that puts us in a strategic position to meet the great global demand for energy,” the company said.
“Daily oil output at the pre-salt progressed from the average of approximately 41,000 barrels per day (bpd), in 2010, to 1 million bpd in mid-2016 – a nearly 24-fold increase.
“The 1 million BPD of mark in the pre-salt was achieved less than 10 years after the first discovery in this geological layer, and only two years after we reached 500,000 BPD there in 2014.”
The second attraction Pura Vida offers to investors involves location.
Although the jury is still out regarding the so-called “nearology” principle, it’s important to note that the offshore Gabon Basin has garnered the attention of a few significant global energy players, including the publicly-listed BP, Exxon, Ophir Energy Plc and Tullow Oli Plc.
While the Perth-domiciled explorer owns 100% of the Nkembe Block, it hasn’t ruled out finding a farm-in partner to help with the project’s development.