VAALCO Energy has entered into a subsequent exploration phase (SEP) on Block 5 offshore Angola with its working partner Sonangol P&P
Both companies had signed a production sharing agreement in 2006 with Angola.
The SEP extends the exploration license for an additional three-year period and the new expiry date for exploration activities is 30 November 2017. The SEP requires both partners to acquire a 3D seismic programme covering 600 sq km and to drill two additional exploration wells. A seismic programme has already completed covering 1,058 sq km over the outboard portion of the block.
Steve Guidry, CEO of VAALCO Energy, said, “Although the SEP comes with additional commitments, we believe this is a coveted block with potential in the deep syn-rift and sag play. The SEP allows VAALCO Energy and its partner to properly assess the results of the current seismic reprocessing that is being merged with previously licensed seismic data through pre-stack depth migration.
“This will help us determine the best opportunities in the pre-salt horizons. The action we took to enter into the SEP removes the uncertainty of an exploration license extension and allows us to focus on our exploration activities on the block.”
VAALCO Energy is now required to drill a total of four exploration wells during the exploration extension period. The four-well obligation includes the two-well commitment under the primary exploration period that carries over to the SEP period. A US$10mn assessment applies to each of the four exploration wells, if any, that remain undrilled at the end of the exploration period in 2017, the company said.
The Transocean 'Celtic Sea' semi-submersible rig has been contracted to drill the first exploration well Kindele-1. The well is targeting the Mucanzo sand with a planned total depth of 2,250 metres in a water depth of 101 metres. Gross unrisked recoverable resources are estimated to be between 20mn barrels to 49mn barrels of oil.
The rig is estimated to be on location in mid-December 2014, VAALCO Energy added.