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Pancontinental Oil & Gas has announced that the PEL 37 Joint Venture has contracted the Ocean Rig Poseidon to drill the Cormorant-1 exploration welllocated offshore Namibia. In order to drill the well the Joint Venture was required to apply to the Ministry of Mines and Energy in Namibia for permission to enter the next phase of the licence, the Second Renewal Exploration Period. Permission has been granted and drilling preparations are well underway.
Pursuant to the farmout by Pancontinental to operator Tullow Oil in 2013, the Company will now be fully carried through the cost of drilling the Cormorant-1 well. The Company holds its interest via its 66.7% owned subsidiary Pancontinental Namibia (‘PCN’) that has a 30% interest in PEL 37. The Company will also be paid at spud of the well circa A$7 million by Africa Energy Corp as completion of its acquisition of a 33.3% interest in PCN.
Additionally, oil major ExxonMobil recently announced its farmin into PEL 82 (adjacent to PCL’s PEL 37) for a 40% interest. This validates Pancontinental’s belief in the prospectivity and potential large size of oil resource targets in the area. The PEL 37 JV has also been strengthened by the entry in the past 6 months of Africa Energy Corp. (via its 33.3% holding in Pancontinental Namibia Pty Ltd) and giant Indian oil and gas company ONGC Videsh Limited.
Commenting on the execution of the rig contract, Pancontinental CEO John Begg said:
‘This is a significant and very satisfying milestone for Pancontinental. First the joint venture unanimously selected the Cormorant Oil Prospect to drill, then the Namibian Government approved the programme and now a high technology drill ship has been contracted for the job. Roll on September.’
Oil Resource Potential
The following table summarises the potential recoverable oil resources for the leading four submarine fan (turbidite) prospects mapped in PEL 37, including Cormorant. A number of other leads have yet to be quantified. The Prospective Resources have been estimated using a deterministic method and represent un-risked, Best Estimate figures. Upside resource estimates are not shown.
Source: Pancontinental Oil & Gas