Swala Says Independent review increases resources and identifies 14 new leads
Swala Energy Limited (“Swala” or “the Company”) announced that Gaffney, Cline & Associates (“GCA”), an independent petroleum advisory firm, have completed their review of the resource potential of the Kilombero Basin, located within the Kilosa-Kilombero licence (Tanzania) and of Block 12B (Republic of Kenya). Swala has an indirect 14.6% interest in the Kilosa-Kilombero licence and a 50% direct interest in Block 12B.
Increase in gross P50 Kito Prospective Resources from 151mmstb to 184mmbstb (21.5mmstb net to Swala)*.
Drilling at Kito on track for 3Q 2016.
Four new leads identified in Kilombero with further gross P50 Prospective Resources of 148.9mmstb (17.4mmstb net to Swala)*.
10 new leads identified on Block 12B, Kenya, containing gross P50 Prospective Resources of 146.5mmbstb (65.9mmstb net to Swala)*.
* Gross Prospective Resources at multiple reservoir levels aggregated by Swala, net of Government back-in rights.
In the Kilombero basin, GCA has re-assessed the magnitude of the Kito prospect and estimated the prospective resources of a further four leads identified during the 2014 seismic campaign.
The analysis was based on newer seismic data and increases the best estimate gross Kito prospective resources to 97 mmstb (11.3mmstb net to Swala on a working interest basis) in the Basal Sandstone and 87 mmstb (10.2 mmstb net to Swala on a working interest basis) in the Sequence 1 sandstone
Swala Oil & Gas (Tanzania) plc (“Swala Tanzania”), in which Swala has a 58.5% equity interest, has completed the tender process of the long lead items for the Kito-1 well and has issued invitations to tender to a number of regionally-based drilling contractors for submissions during March 2016.
The technical review of the Pangani licence showed no structures of commercial interest and the Joint Venture has confirmed its desire to relinquish the licence to the Tanzania Petroleum Development Corporation.
In Block 12B, GCA estimates of gross Prospective Resources in 10 identified leads are shown in Table 3. Characterising the leads and prospects on the basis of the 2014 seismic data has been complicated by the existence of shallow basalt layers that are a feature of the East African Rift System. The effect of the basalts on the seismic has been to add uncertainty to the location of the proposed exploration well.
The Joint Venture, operated by Tullow (Kenya) B.V., a subsidiary of Tullow Oil (LSE: TLW) has therefore engaged with the Government of Kenya with the aim of carrying out a Full-Tensor Gravity (“FTG”) Survey over the block to optimise the location of the exploration well and thereby maximise its chances of success. On the 10th of March 2016 the Government of Kenya approved the new work programme and granted an extension to the 16th of August 2017 within which to drill the 12B exploration well.
The FTG work would be carried out in conjunction with reprocessing of the 2014 seismic to improve the character of the sediment fill below the basalts, as demonstrated by Swala’s work late last year.
Dr. David Mestres Ridge (CEO) said,
“The GCA assessment shows that, even at this early stage, the potential of 12B and Kilombero remains significant. The delay to the 12B drilling will allow the Joint Venture to optimise their drilling location and to develop a better technical view of prospectivity that is currently partly obscured by the local shallow basalts.
We are very excited by the increased potential of the Kilombero basin and of the Kito prospect in particular. Swala Tanzania’s operations team continue preparations to drill one of the few onshore oil wells being drilled in East Africa this year and estimate that the Kito-1 well is on track for drilling in 3Q 2016. We look forward to updating the market further on the progress of the drill campaign.”
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