An optimistic London-based independent exploration and production company Panoro Energy ASA is getting ready to commence an ambitious hydrocarbons search program in its newly found Tunisian market barely three months after it acquired DNO Tunisia Exploration AS, a subsidiary of Norwegian firm DNO ASA that is divesting from assets it considers “non-core.”
This week Tunisia Exploration AS signed Head of Terms with Compagnie Tunisienne de Forage (CTF), a government drilling entity, for the use of its CTF-4, a 2,000-horsepower onshore rig or similar equipment to shore up plans for drilling Panoro's first well, Salloum West-1 (SAMW-1) most likely in the first half of 2019 in the high potential 3,228 square kilometer Sfax offshore exploration permit (SOEP) where the company is the new operator with a 87.5 percent interest after DNO's exit.
Panoro says progress toward spudding the SAMW-1 well that is targeting Sfax license's Bireno formation at approximately 3,200m vertical depth depends on how fast the Tunisian National Oil Company (ETAP), the country's national oil company, would approve the already submitted application for the second three-year extension of the permit, due in December 2018, alongside the proposed final drilling program and budget.
The insatiable appetite by Panoro for the Tunisian upstream market has largely been boosted by the July 2018 acquisition of DNO Tunisia AS assets and the fact that already the Sfax permit has three oil discoveries of Salloum, Ras El Besh and Jawahra with an estimated 20 million barrels of gross recoverable oil and 250 million barrels of P50 unrisked gross estimate according to previous surveys.
“SAMW-1 represents a low cost and attractive risk-reward drilling opportunity which could enable a fast-track development of the Salloum oil discovery located on the Sfax offshore exploration permit,” said Panoro CEO John Hamilton who started spearheading the Oslo-listed exploration and production company in 2015 a period when its penetration into Africa was limited to the Dussafu license offshore southern Gabon and OML 113 offshore western Nigeria.
Details of the planned drilling of SAMW-1 indicate high expectations on the part of Panoro Energy management that is eager to explore additional resources up-dip the Salloum-1 discovery well that was drilled by British Gas in 1992 and which Panoro wants to develop via a tie-in to existing adjacent oil infrastructure.
This palpable anticipation by Panoro and prediction of successful drilling of the SAMW-1 is also fueled by the previous test results of Bireno formation of 1,846 bopd and several other pro-drilling factors such availability of a drilling rig, an already assembled arsenal of other drilling equipment in the company's Sfax warehouse and detailed existing 2D and 3D seismic data covering the SAMW-1 location.
Panoro, which announced a $4.6 million in revenues from oil and gas in the second quarter of 2018, will finance the SAMW-1 from its existing financial resources as part of the company's cost pool of SOEP to be recovered “against future revenues through the cost oil mechanism.”
In Tunisia, Panoro appears to have found a preferred upstream investment destination and the acquisition of all DNO Tunisia AS' interest in the Sfax offshore, Ras El Besh concession and Hammamet offshore, could turn out to be a safe bet for a company that has already indicated strongly its desire for more partnerships with international oil companies and looks forward to come out successful in the ongoing talks with an unnamed Tunisian-based oil and gas entity.
More upstream activities are lined up for Panoro in the Tunisian hydrocarbons market, which many consider one of the low-operating expenditure environments in North Africa, with the $2 million acquisition deal with Medco for the Hammamet Offshore Exploration Permit in which it had a 46% stake and Medco was the operator. The license expired at the end of September 2018.
In addition, Panoro strongly feels the withdrawal of U.K.'s Petrofac from the Tunisian upstream market after selling the 45 percent stake it held in Chergui interest to France's Perenco heralds the beginning of a growth period for independents in Tunisia as large oil companies train their investment eyes elsewhere.