Pancontinental commences drilling next door to Exxon
Pancontinental Oil & Gas (ASX:PCL) has provided a crucial update on its Cormorant-1 offshore well, informing the market that drilling is now underway on site.
PCL holds an effective 20% interest in the project, and is not required to contribute to the uncapped cost of drilling. PEL 37 covers an area of 17,295 km2 in the Walvis Basin offshore Namibia (an emerging African Nation that investors should take into consideration when determining their investment focus as there are still risks involved).
Cormorant-1 is being drilled by the Ocean Rig Poseidon in 45 metres of water. The sixth generation drillship will test one of several mid-Cretaceous marine turbidite ‘fan’ sandstone systems on site.
Drilling and evaluation of the well is expected to take 34 days. The well has gross best estimate of recoverable resource potential of 124 million barrels of oil.
PEL 37 is operated by Tullow Namibia Limited, a subsidiary of Tullow Oil plc.
Due to the commencement of drilling, PCL will now receive US$5.5m from Africa Energy Corp.
The key participants in Cormorant-1 are:
- Tullow Namibia Limited (operator) 35%
- Pancontinental Namibia Pty Ltd 30%
- ONGC Videsh Limited 30%
- Paragon Oil & Gas Ltd 5%
Pancontinental owns two thirds of Pancontinental Namibia Pty td.
Of course, as with all oil exploration, success is not guaranteed — consider your own personal circumstances before investing, and seek professional financial advice.
For those unfamiliar with the Pancontinental story, it is a wildcat oil and gas group that has evaluated several globally significant exploration plays during its long history.
It has a current position in offshore Namibia, where oil giant ExxonMobil has farmed into the block next door to Pancontinental’s PEL 37 for a 40% interest.
As stated in our in-depth look at Pancontinental last week, Exxon’s block contains an extension of the play trend Pancontinental is drilling with the Cormorant-1.