Oil and Gas Exploration in Africa

Operations

South Africa, Block 11B/12B

Block 11B/12B is located in the Outeniqua Basin approximately 175 kilometers off the southern coast of South Africa. The block covers an area of 18,734 square kilometers with water depths ranging from 200 meters in the north to 1,800 meters in the south. The Lower Cretaceous Post-rift Paddavissie Fairway, which contains the Luiperd and Brulpadda discoveries, is located within the southwest corner of the block.

Total’s first attempt to drill the Brulpadda Prospect in 2014 was suspended prior to reaching target due to difficulties experienced by the drilling rig in the harsh deepwater environment. After extensive review of the challenging surface conditions, Total contracted the Odfjell Deepsea Stavanger semi-submersible rig to drill the Brulpadda-1AX re-entry well commencing in December 2018.

The Brulpadda well was drilled in approximately 1,400 meters of water by the Odfjell Deepsea Stavanger semi-submersible rig. The well targeted two objectives in a deep marine fan sandstone system within combined stratigraphic/structural closure. Following the success of the main objective, the well was deepened to a final depth of 3,633 meters and was successful in the Brulpadda-deep prospect.

The well encountered oil pay and a total of 57 meters of net gas condensate pay over two Middle to Lower Cretaceous high-quality reservoirs. Core samples were taken in the upper reservoir, and a comprehensive logging and sampling program was performed over both reservoirs. The success at both the Brulpadda primary and secondary targets significantly de-risked other similar prospects on Block 11B/12B.

In March and April 2019, the operator acquired 570 square kilometers of 3D seismic with the Polarcus Asima vessel. The first phase of 3D seismic covered the Brulpadda discovery and the Luiperd prospect. The fully processed 3D seismic dataset validates the direct hydrocarbon indicators and thick reservoir development at the main objective and illuminates the deep target, confirming the large resource potential of the Paddavissie Fairway. The 3D seismic also increases our confidence in the sedimentological and structural interpretation and was integral in selecting the location for the Luiperd-1X exploration well on Block 11B/12B.

The joint venture partnership analyzed and integrated the fully processed 3D seismic with the analysis of the core samples and the modular formation dynamics tester (“MDT”) samples. The core indicates a high net to gross in the main objective with good intergranular porosity and permeability. The pressure, volume and temperature (“PVT”) analysis performed on the MDT samples confirmed the high liquid yield in the main gas condensate zone of the main and deep reservoirs.  

In July 2019, the operator of Block 11B/12B, Total, executed a drilling contract with Odfjell Drilling for the Deepsea Stavanger semi-submersible rig, the same rig that drilled the Brulpadda discovery in February 2019. 

In May 2020, the Block 11B/12B joint venture received the fast-track 2D seismic dataset from Shearwater GeoServices Holding AS for the 7,033 linear kilometer 2D seismic program completed earlier in the year on Block 11B/12B. Initial interpretative work confirmed the Kloofpadda Play Trend, which consists of a number of large and encouraging leads. The Block 11B/12B joint venture received the fully processed 2D seismic dataset in early September and has begun full prospect analysis for the eastern part of the block. 

In June 2020, the Block 11B/12B joint venture received the fast-track 3D seismic dataset from Petroleum Geo-Services ASA (“PGS”) for the 2,305 square kilometer 3D seismic program completed earlier in the year on Block 11B/12B. Initial interpretive work has identified a number of additional leads. In September 2020, the Block 11B/12B joint venture received the fully integrated fast track processed 3D dataset. Furthermore, the final fully processed 3D over the Paddavissie Fairway which integrates the PGS and Polarcus Limited acquired surveys is due to be delivered early 2021 and will be used to mature previously identified leads into prospects.

On October 28, 2020, the Company announced a significant gas condensate discovery on the Luiperd Prospect on Block 11B/12B. This discovery reconfirms this world-class exploration play with substantial follow-on potential and follows the adjacent play-opening Brulpadda discovery in 2019 that proved a significant new petroleum province in the region.

The Luiperd-1X exploration well was drilled in approximately 1,800 meters of water by the Odfjell Deepsea Stavanger semi-submersible rig to a total depth of about 3,400 meters. The well targeted the hydrocarbons potential in a mid-Cretaceous aged deep marine sequence where fan sandstone systems are developed within combined stratigraphic/structural closure. The well encountered 73 meters of net gas condensate pay over a mid-Cretaceous high-quality reservoir interval and did not encounter the water contact. Following a comprehensive coring and logging program, the Block 11B/12B joint venture is now testing the Luiperd-1X well to assess dynamic reservoir characteristics and deliverability with results expected by the end of November 2020. Due to the success at Luiperd, the joint venture has decided to proceed with development studies and engage with authorities on commercialization of gas rather than drilling another exploration well in this program.

The joint venture partnership was recently granted approval from the South African Government for entry into the Third Renewal Period for the Block 11B/12B Exploration Right, which is for a period of two years ending September 7, 2022.

Africa Energy holds a 4.9% effective interest in the Exploration Right for Block 11B/12B. The Company owns 49% of the shares in Main Street 1549 Proprietary Limited, which has a 10% participating interest in the block. Total as operator holds a 45% participating interest in Block 11B/12B, while Qatar Petroleum and CNRI hold 25% and 20%, respectively.

In August 2020, the Company announced the signing of definitive agreements to increase its effective interest in Block 11B/12B offshore South Africa from 4.9% to 10%, subject to certain consents and approvals. See the Company’s Management’s Discussion and Analysis dated November 10, 2020 for more detailed disclosure.