Dominion Uganda has signed a letter of intent (LOI) with Oil and Gas Exploration Cracow (OGEC), subject to government approval, for a rig to drill Ngaji-1 on Exploration Area Block 4B (EA4B).
It is anticipated that the rig, which is owned by John Energy, will be mobilised in May, with drilling to commence in June on the Ngaji (Silverback Gorilla) prospect (unrisked recoverable reserves of over 100 million barrels).
Ngaji is a tilted-fault block, structural closure, chosen as the best location to test the geology of the Ugandan side of the Lake Edward basin. Site preparation will commence before the end of this month. An environmental and social impact assessment for a contingent seismic program has been initiated for any subsequent appraisal work on the acreage later in the year.
The Ngaji-1 well is said to be the first exploration well ever to be drilled in the Lake Edward basin of the Albertine Rift. It is located in an area comparable to that of the Buffalo-Giraffe discovery in Exploration Area 1, reported to contain around 400 million barrels of recoverable oil.
The results of the well will not only assess the prospect, but primarily serve to evaluate the whole of the basin’s hydrocarbon potential. Success will lead to an expansion of exploration and appraisal activity in EA4B and potentially the neighboring Block 5 in Democratic Republic of Congo (Dominion Congo 46.75%), the company said.
The Block 7 3D survey will focus on pre-tertiary structural and stratigraphic prospects already identified from the existing 2D seismic. The survey has been specifically designed to support further amplitude variations with offset (AVO) studies for direct hydrocarbon indicator (DHI) analyses; positive AVO responses on the 2D data having been used to identify the prospects thus far.
The Anadarko Windjammer gas discovery, offshore deepwater northern Mozambique, has been encouraging in that it demonstrates the presence of source rock capable of generating significant volumes of hydrocarbons in this region, which was the predominant risk associated with the offshore East African Margin prior to the discovery.
In Mandawa, Dominion and its partner Maurel & Prom are progressing operations for the upcoming Kianika-1 well. Well site and road construction have already begun in anticipation of the commencement of drilling in June. Kianika-1 is targeting recoverable resources of 77mmboe in a structural closure. The well is onshore and 200km south of the country’s capital Dar Es Salaam.
Last month, Dominion announced that it will reduce its interests to 10% in the Mandawa and Kisangire PSAs, through a farm-out agreement with Maurel & Prom. This agreement remains subject to government approvals.
Andrew Cochran, chief executive of Dominion Petroleum, said: “With the funds from our placing, all necessary services and equipment having been identified and now secured, we are kicking off our 2010 exploration program. This includes the first ever well in the Lake Edward basin of Uganda, as well as a large scale 3D seismic shoot in the emerging East Africa deepwater play of Tanzania.
“We have spent much time and effort getting all in place and are now ready to get to work on the ground. The next few months will therefore be the most active period experienced by Dominion so far in its corporate history.”