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Wentworth Resources Limited announced during its 3Q17 results announcement that it has substantially advanced pre-drilling activities for the Tembo appraisal well in its oil and gas concession in Mozambique with a plan to commence drilling operations late in Q2 2018.
The Company has completed the Tembo-2 well design and has commenced the procurement process for long lead items. Furthermore, it has identified drilling rigs in the region capable of drilling to the planned depth and are in the process of determining the civil works necessary to prepare the well site location. In parallel, it is actively seeking one or more industry partners to participate in the drilling of this prospect and to-date have received positive interest. If successful, it will provide significant running room within the block and should add substantial value to the investment in Mozambique.
Completed the analysis of the Tembo-1 well drilled in 2014 and the reprocessing of existing 2-D vibroseis seismic data from the Rovuma Onshore Block while continued mapping and interpretation of all existing data.
Continued planning of the drilling activities for an appraisal of the Tembo-1 gas discovery, including designing the appraisal well, selecting a well location, obtaining necessary environmental permits and initiating preliminary procurement activities.
Continued the farm-out process to secure an industry partner to participate in the appraisal programme in advance of drilling the appraisal well in 2018.
Appraisal of the Rovuma Onshore Block
Extension of the Rovuma Onshore Exploration Concession to conduct an appraisal of the Tembo-1 gas discovery was granted to Wentworth by the Government on June 15, 2016. On that same date, Wentworth was approved as the operator of the concession and now holds an 85 percent participation interest, with the Government holding the remaining 15 percent. The anticipated work program includes drilling of an appraisal well, which is scheduled to commence operations by June 2018.
During Q3 2017, activities mainly involved reprocessing and analysis of existing seismic data with a view to identifying a well site location, obtaining environmental licenses, planning for the drilling of an appraisal well and compilation of tenders for the procurement of a drilling rig and long lead items such as casing and tubing for the well.
The Tembo-2 well will appraise the discovery made at Tembo-1 Well in December 2014. Tembo-1 was drilled to 4,553m measured depth. All data available from the Tembo 1 well has been thoroughly examined by the Company. The Tembo 2 appraisal well is designed to reach a total depth of 3,200m and is planned as a vertical appraisal well to the Lower Cretaceous. Wentworth has started a process to procure the drilling rig and long lead items for the appraisal well. Expressions of interest (EOI) have been prepared for supply of the drilling rig and casing and tubing. The Company has identified several drilling rigs currently located within the region which are capable of drilling the planned appraisal well. The two EOIs are expected to be published in a Mozambican newspaper by the end of 2017 with an invitation to tender being sent to prospective bidders prior to year end.
Finalization of the well location and subsequent site visits to further inspect the site for the design of the well pad and site preparation, have been delayed due to the deteriorating security situation in and around the Macimboa da Praia region which is adjacent to the Company’s concession area. Clashes between police and extremists have increased during October resulting in a heightened risk profile. Wentworth is monitoring the security situation closely and has sought advice from the Mozambican Authorities, the Canadian High Commission, other companies operating in the region and local security and risk management companies.
In July 2017, a formal farm-out process was initiated to secure one or more industry partners to share in the risk of drilling of the Tembo-2 appraisal well. The exercise is ongoing, and Wentworth anticipates securing an industry partner prior to commencing drilling operations in 2018. Funding of the drilling of the Tembo-2 appraisal well will be through internally generated cash flows and sharing of the cost with one or more industry partners.
Following the appointment as Operator of the Rovuma Onshore Block in Mozambique in June 2016, the Company established an operational presence in Mozambique; directly attributable costs relating to the appraisal activities within the Rovuma Onshore Block are being capitalized. Directly attributable costs during the third quarter and year to date totaling $0.20 million (Q3 2016 – $0.39 million) and $0.91 million (YTD 2016 – $0.53 million) were capitalized.