Privately-owned oil firm Impact Oil & Gas has signed a farm-out agreement with Shell for the 50% working interest and operatorship in the Transkei & Algoa exploration right, offshore South Africa.
Transkei & Algoa blocks are located offshore eastern South Africa and cover approximately 45,838km² in water depths up to 3,000 meters.
Shell has also been granted the option to acquire an additional 5% working interest should the joint venture elect to move into the Third Renewal Period, which is expected to be approximately in 2024.
Siraj Ahmed, CEO of Impact Oil & Gas, said: “We are delighted to have secured a farm-out partner of Shell’s caliber, highlighting the significant value potential of our exceptional South African exploration portfolio. Shell joins the Transkei & Algoa license at a very exciting time for exploration drilling in South Africa."
"[Shell brings] substantial exploration expertise, with particular understanding of the potential of offshore South Africa, and an agreed strategy to accelerate the work program to build upon the considerable work already undertaken by Impact and the previous JV partnership," Ahmed said.
While part of the same license, the Transkei & Algoa blocks have different geological settings, Impact says.
The Algoa block is situated in the South Outeniqua Basin, near Total's Block 11B/12B, containing the Brulpadda gas condensate discovery and where Total has recently announced a further significant gas condensate discovery, following the successful drilling of the Luiperd-1X exploration well, which it is currently testing.
The Transkei block is located north-east of Algoa in the Natal Trough Basin where Impact says it has identified highly material prospectivity associated with several large submarine fan bodies, which the new joint venture will explore with focused 3D seismic data and then potential exploratory drilling.
Impact and Shell plan to acquire over 6,000km² of 3D seismic data during the first available seismic window following completion of the transaction. This window is expected to be in the first quarter of 2022.
Closing of the transaction is subject to customary conditions, including the approval of the Government of South Africa.
The participating interests in the Transkei & Algoa blocks following completion of the farm-out by Impact will be as follows: Shell (Operator), 50% and Impact, 50%.