New African Global Energy and Tower Resources have decided to drop their deep-water frontier acreage offshore offshore South Africa, but will be seeking a third partner for another exploration block.
The firms were partners on the SW Orange Basin Technical Co-operation Permit (TCP), with New African Global Energy as operator.
The pair have have agreed not to proceed with an application to convert the TCP for the ultra deep-water frontier area into an exploration right.
However, they will continue with the Algoa-Gamtoos Exploration Right, on which they received approval to enter the First Renewal Period in September 2015.
A 2016 work program and budget have been approved between the partners. This includes further geophysical work and the interpretation of previously acquired 3D seismic data with a view to seeking a partner for the next stage of operational activity.
Tower said its exit from the "high-cost, ultra-deepwater frontier basin," was consistent with its move towards a more balanced portfolio of proven and emerging basins. "This decision will enable the company to focus its efforts in South Africa on the Algoa-Gamtoos ER, which offers greater near-term potential."
The Algoa-Gamtoos ER includes three basins and multiple plays. The 3D seismic which was acquired in 2014 across the Algoa canyon has been supplemented by the reprocessing of an older 3D survey and the merged volume will now be interpreted with a view to defining drillable prospects for 2017/18. The license also includes many leads defined on 2D seismic in the Gamtoos Basin, and the Joint Venture will be evaluating the potential to better define these with the acquisition of additional 2D or 3D seismic in 2017.
While Tower’s current work program is focused on the shallow areas, the license also includes unexplored deep-water acreage within the Outeniqua Basin.
In 2014, Total attempted to drill the Brulpadda-1 exploration well in Block-11B/12B adjacent to the Algoa-Gamtoos license. However, the well was abandoned owing to mechanical difficulties with equipment on the rig and Total has indicated that it may return to drill in 2016/17. In the event of success at Brulpadda, the prospectivity of the deep-water part of Algoa-Gamtoos block would be significantly enhanced.
Graeme Thomson, Tower’s CEO commented: “We are concentrating on the area in South Africa with the greatest near-term commercial potential, have enhanced our funding position and have also reduced our contingent commitments. The proceeds from this withdrawal mean that our South African work program for 2016 is now self-funding.”