Ann: Quarterly Activities Report, page-14

Partner waiting for word from Woodside on promising Namibia exploration block

"Woodside continues to keep Australian junior Pancontinental Energy guessing about its intentions surrounding a promising exploration block in Namibia’s red-hot Orange basin, no less than 16 months after securing an option to operate the acreage. Since the Australian major unveiled its farm-in option in March 2023, Petroleum Exploration Licence (PEL) 87 has arguably become even more attractive because it lies right next door to the block housing Galp Energia’s stunning Mopane oil and gas discovery, which holds an in-place resource of 10 billion barrels of oil equivalent.

Woodside has an option to acquire a 56% stake in the licence after paying for a 6593-square kilometre 3D survey and giving Pancontinental $1.5 million in cash. This option can be exercised at least 180 days after delivery of the seismic survey data.

In late April, Pancontinental said the long-stop date by which Woodside has to exercise its farm-in option — by committing to drill an exploration well — would be 180 days from the date that the PEL 87 partners give Woodside a licence to hold ongoing rights to the 3D seismic data.

Pancontinental said on Wednesday it is “working to finalise” the seismic licence with the Namibian authorities so the long stop date “can be established as soon as possible”. However, the company stressed that Woodside could still exercise its option at any time prior to the long stop date. As things stand, both the current operator and Woodside are undertaking separate technical analyses of the 3D data. Pancontinental said its primary focus is on Cretaceous play concepts that range in age from Barremian channelised fans to Cenomanian channels, within which it has identified the full array of trapping styles. The operator noted that seismic bright spots and amplitude-versus-offset (AVO) anomalies — all potential indicators of the presence of hydrocarbons — are “evident” within some exploration leads identified within the greater Saturn complex. Pancontinental said its in-house technical team is focused on maturing interpretation of key sequences within the Cretaceous petroleum systems that host on-trend discoveries, such as TotalEnergies’ Venus find.

Earlier this month, a specialist consultancy started to undertake an AVO study. Pancontinental said the bright spots “clearly indicate” the presence of deepwater feeder channels running west into what are interpreted to be deepwater turbidite fan systems, one of which appears to be detached from the feeder system. These bright spots are located north of the structural high around the legacy Moosehead-1X exploration well, and east of a regional high. “These features,” argued Pancontinental, “are thought likely to host high quality reservoir sands, of comparable age to those that host TotalEnergies' giant Venus discovery.” The operator will soon start work on a basin modelling study to fully define the hydrocarbon source kitchen and hydrocarbon charge mechanism and its timing. Once the AVO and basin modelling work are complete, the Aussie junior can then begin to better define individual prospects. Even so, Pancontinental said it “remains encouraged by the high quality of the data and is increasingly confident in the hydrocarbon potential of PEL 87”. Pancontinental holds a 75% stake in PEL 87 and is partnered by local player Custos Energy on 15%, while state-owned Namcor has a 10% interest."