Ann: Mukuyu-2 Drilling Update, page-362

I see everyone is stressing about fault seal risk this weekend... My views on this topic:

- I think faulting is more of a problem for the shallower horizons ie. Dande etc. than the deeper horizons ie. Upper + Lower Angwa. You can see from the seismic cross sections that it's really very busy re. faulting above the Forest zone. I reckon that's why Dande is not delivering - it's just all too fractured near surface. Maybe 3D seismic will help identify better Dande targets?
- however, as you go deeper ie. Upper/Lower Angwa the faulting becomes much "quieter" and less of an issue. This is a major positive.
- going deeper does have its benefits ie. greater compaction so better sealing (a Mobil comment on this Basin)
- the IVZ team are acutely aware of fault seal risk and will have undertaken a thorough review of this issue prior to choosing to drill M2 in the Horst Block. They must be of the view that fault seal risk is limited which gives me a lot of comfort
- the seismic shows DHIs in the Northern Block which I discussed with VOGC in the last few days. If the gas (or oil) has all escaped would we have any DHIs at all?! Probably not imho.... Again IVZ should have done a very thorough analysis of this and come to the view that M2 has good DHIs in the Upper Angwa so there is probably something there worth drilling.

Overall I wouldn't bet against IVZ.... Too much evidence to suggest that the gas (+ light oil) is present in the Upper Angwa at M2. I can't say much about Lower Angwa because we have no data but I'm willing to bet we have gas there also given the overall size of Mukuyu.