Dominion Petroleum (AIM: DPL) said it is commencing its 2010 exploration programme, embarking on the most active period in corporate history that will include drilling and 3D seismic acquisition at its African projects.
Dominion has secured a rig from Oil and Gas Exploration Cracow (NYSEMKT:OGEN) to drill the Ngaji-1 well on Exploration Area Block 4B on the Ugandan side of the Lake Edward basin, which will be its first exploration well in Uganda. The rig is expected to be mobilized in May and drilling on the Ngaji prospect that boasts unrisked recoverable reserves of 100 mmbbls (million barrels) of oil will commence in June. The well will assess the prospect and evaluate the basin’s hydrocarbon potential.
The well is located in an area comparable to that of the Buffalo-Giraffe discovery in Exploration Area 1, reported to contain around 400 mmbbls of recoverable oil, Dominion said in the statement.
Should the well be successful, Dominion will step up its exploration and appraisal activities in EA4B and potentially the neighboring Block 5 in DR Congo.
The company has also contracted a vessel to shoot 3D seismic on its wholly owned Offshore Deep Water Block 7 in Tanzania, which is expected to commence in June. The vessel is currently operating in blocks just south of Dominion’s acreage. Fugro-Geoteam AS are being awarded the contract to conduct the seismic acquisition.
The Block 7 3D survey will focus on Pre-Tertiary structural and stratigraphic prospects already identified from the existing 2D seismic. Dominion said that the presence of source rock capable of generating significant volumes of hydrocarbons in the region was demonstrated by the Anadarko Windjammer gas discovery offshore deepwater northern Mozambique, which eliminated the predominant risk associated with the offshore East African Margin.
Dominion also expects to commence the drilling of the PSA Kianika-1 well onshore Tanzania in June 2010, where well site and road construction has already begun. The well is targeting recoverable resources of 77 mmboe (million barrels of oil equivalent) in a structural closure.
On 15 February 2010, Dominion announced that it would reduce its interests to 10% in the Mandawa and Kisangire PSAs, through a farm-out agreement with Maurel & Prom, which still remains subject to government approvals.
“With the funds from our placing, all necessary services and equipment having been identified and now secured, we are kicking off our 2010 exploration programme. 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,” said chief executive Andrew Cochran.
Shares in the company rallied more than 6% on the update.
Disclosure: The author holds no positions in the company