The block located at the southern end of Lake Albert is to be granted initially to Armour, which considers it to be a highly prospective oil play. Depending on the consent from the Ugandan government, it will be placed subsequently into a specific project company.
Armour has estimated low, best and high unrisked prospective oil resource of the Kanywataba Block in the range of 646-969mmbbls of oil in place across seven prospects.
The Kanywataba Block is contained in the Albertine Graben basin which has till date yielded discoveries totaling around 5 billion barrels of oil initially in place.
As per the terms of the agreement for the block, Armour will retain 16.82% of stake in the Ugandan block while DGR will cover the tenement expenditure and work program commitments for the first two years. It will also compensate Armour for the costs.
Armour will hold DGR’s 83.18% in trust until the transfer is closed.
Recently, Armour had concluded negotiations with the Ugandan government which is expected to grant it the exploration license for the Kanywataba block this month.
The exploration license of the Kanywataba block will be for two years from the date of its granting. Subject to completion of the work program during the two-year period, the license is renewable for an additional period of two years.
In the first period of work program, the partners plan to carry out geological and geophysical works, review of available data, reprocessing of seismic data along with acquisition of 100 line kilometres of 2D seismic.
