Apologies if this has been posted already. For the complete review of the GALP Q&A use the link. I have extracted information relevant to Mopane specifically. Has anyone been able to source the presentation yet??
Mopane highlights extracted and posted below We have just concluded the first exploration campaign, which considerably derisked the Mopane area. The quality and size of the resources found, as well as the test results obtained so far, indicate that we may be in the presence of major commercial discoveries, reinforcing our view of Mopane’s potential. And we see further upside. Therefore, the team focus will now be on planning the next exploration and appraisal activities to evaluate the wider Mopane complex.
In Namibia, of course, we have made good progress in PEL83, where Galp and our partners in Namibia have significantly de-risked the Mopane complex. We have identified significant light oil columns in high-quality reservoir conditions. The wells and the test results were quite impressive, and they have exceeded our pre-drill views on the potential of the area. We are already fast-tracking the next steps. We are now launching a new four-well campaign for both exploration and appraisal to better understand the potential of the Mopane complex. We're not looking yet at the northern part of the block. The next few wells – we’ll start with four appraisal and exploration wells, and those will be keepers – will be focused on the wider Mopane complex only. Fast-tracking this asset for us is the key priority for Namibia, for Namcor, for Custos, and for Galp, of course.
On the oil in place, 10 billion or higher. It’s our “boe” in place. It’s our best assessment based on the information that we have so far. We have data collected from the two wells and the DST, and all this has reinforced our pre-drill geological model that we had, which itself was based on our very extensive analysis of the area over the last decades. This is not a new asset for Galp. The data covers only some of the structure that we had initially identified in the seismic. Some of this has been de-risked, plus some additional hydrocarbons that we found in the deeper target. We have calibrated - or we are calibrating - the model based on what we have proven so far, and this is the estimates that we get. Now, is there risk associated with the estimate? Yes, up and down. So that's why we need to do more exploration and appraisal activities to better assess the full area of the Mopane complex. So, lots of information that we’re still analysing, a lot of the cores, the fluids have been sent into the labs. All this, we think, is going to demonstrate what we saw in the seismic. A lot of reservoir updating has to be done. But you know Galp by now - we are a measured conservative company when it comes to estimates and external communications.
On the 10 billion, I believe, in your press release you mentioned the AVO-1 has the same pressure regime in the two wells. Is it fair to assume that the majority of the volumes are in the AVO 1? We're not commenting on this. We have selected the location of these exploration wells to get as much information. We did not necessarily go for the sweet spot. It's really to look at the extensions. The eastern part of AVO-1 was targeted because we knew we were going to cross other AVOs. Now, if you look at the western part of AVO-1, it extends a lot to the east as well, and AVO-3 extends very significantly to the west of where we drilled.
Mopane is not a gas discovery. Mopane is light oil with gas condensates. These are fluids with associated gas. We're not guiding on GOR at this stage, and the fluids are not the same everywhere. We will drill deeper where we expect more oily fluids going forward. More importantly, associated gas is not expected to be an issue for the developments for many years. Reinjection will be prioritised during the initial years.
Mopane 1 and 2 are eight kilometres apart, and any pressure response to confirm continuity between them will take time. But the pressure regimes and the logs give a good indication of a potential communication between the wells.
Clearly, it's too soon to give any guidance on recovery. We don't have enough support at this stage to provide you with a credible estimate. And this also depends on many factors, including how much hardware we will deploy and when. So, first we need to fine tune our development concept definition. We need to agree this with our partners and with the government of Namibia before we disclose this, but I would say the test results were very impressive. Yes, albeit in only one location so far. And when you have low viscosity, good porosity, high pressures, high permeabilities, you can suspect that productivity is going to be very interesting, and we'll probably have a lot less capex for the wells than we were expecting before. It also helps that we have no CO2 and no sulphur contaminants.
The 10 billion barrels of oil equivalent we have in place is our mean case based on our knowledge of the structure of our complex. We drilled part of it, now we launched a campaign for the exploration and appraisal that will further access and confirm our mode.
Thanks for your questions. I'll try to summarise the answers. Any surprise versus pre-drill? Yes, we found a much more prolific profile than we expected, and the DST results corroborate our findings. There are other prospects in the block, yes. There are several areas in the north that potentially have large, world-class accumulations that are in our plans for the future. What we need to do more for the commerciality, we need to continue our appraisal and exploration campaign to confirm the total volumes we have, and as such, develop our concept for full development.
The seismic that we shot early in the project, we're still processing it. We have had a quick look at it, and it's quite promising and will help us on our future development with the project. The confidence that we have comes from the past 14 years studying and also looking at the analogues of our neighbouring, which helped to calibrate our model. During our exploration campaign that we confirmed and increased the confidence that we have. Therefore,we're quite confident on our mean case of 10 billion of oil equivalent in place.
Kind regards OldGeo
PCL Price at posting:
2.4¢ Sentiment: Buy Disclosure: Held
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