Block 2B, which holds the existing Soekor oil discovery, is contained in the Orange Basin off the west coast of South Africa
Azinam and Panoro set to join Africa Energy in Block 2B, offshore South Africa. (Credit: Pixabay/ C Morrison)
Africa Energy has agreed to offload a 62.5% participating stake in the offshore South African concession Block 2B to Azinam and Panoro Energy through separate farmout agreements.
Block 2B, which holds the existing Soekor oil discovery, is contained in the Orange Basin off the west coast of South Africa. The offshore concession, which spans 3,604km2, is located 300km north of Cape Town.
Africa Energy is planning to drill the Gazania-1 exploration well in the offshore concession by the end of this year. The exploration block is contained in water depths in the range of 50-200m and is estimated to hold gross prospective resources of 349 million barrels (MMbbls).
Africa Energy president and CEO Garrett Soden said: “Block 2B has the A-J1 oil discovery from 1988 in shallow water close to shore with significant contingent and prospective resources.
“The Gazania-1 well will target a relatively low-risk rift basin oil play up-dip from the discovery. We look forward to working with our new partners Azinam and Panoro to prove up more resource offshore South Africa.”
Currently, the Canadian oil and gas company holds a 90% stake in Block 2B. The remaining 10% stake is indirectly held by Crown Energy.
Following the two farmout deals, Africa Energy will retain a 27.5% stake in the block.
The company will farmout a 50% stake in the concession to a subsidiary of Azinam and the other 12.5% to a subsidiary of Panoro Energy.
Azinam to become operator of Block 2B
Azinam, which is a Southern Africa-focused oil and gas explorer backed by Seacrest Capital, will become the operator of Block 2B, upon closing of the farmout deal.
Azinam managing director Daniel McKeown said: “With this transaction, Azinam is positioned to deliver the first major oil production offshore South Africa.
“With A-J1 having flowed oil to surface and with the benefit of a significant database of well and seismic information, Azinam believes that Block 2B has the potential to provide South Africa with its first major offshore oil production. This transaction will allow for a well to be drilled to test the wider potential of the A-J1 discovery.”
The closing of the two farmout deals are subject to approval from the South African government and also meeting of certain other conditions.