Notes from Webinar:SWC- poro perm analysis mostly done- working...

Notes from Webinar:

SWC
- poro perm analysis mostly done
- working on special saturation analysis now (at lab)
- will release results once all complete
- no guidance on release date ATM (SM has taken a step back from technical analysis this year)

M1 has been closed off, we'll head removed. No intent to re-enter

M2
- reason for change to original location: not influenced by surface access. Main reasons - due to velocity data from M1 (impacted seismic reprocessing), shallower (horst block), ability to drill near vertical well (mex dev 12deg), ability to test lower Angwa
- comfortable that source rock is pervasive over the basin (not worried about migration distance). Likely multiple charge histories
- don't want to stay on southern flank of basin, keen to get data and understand region ASAP
- chat about fluid sampling methodology - all sounding very confident. Ability to take 18 fluid samples - 2 per data point. Very expensive rental for equipment
- plan to drill section to TD, then run wireline (gamma, resist, density, neutron) rather than after each HC section. This time also getting NMR and FMR data, then fluid sample. Not doing real time sampling while drilling due to risk and cost (a lot more gear on bottom hole assembly - $7M if lost)
- Pebbly Arkose net to gross potential - broken into separate reservoir intervals, high NTG within these (didn't give figure). Have seen viable intra PA seal units / valid traps
- Upper Angwa - definitely potential for light oil (on verge of volatile oil and gas condensate - phase envelope) in lower UA sequences. Multiple periods of charge - gas came later and forced oil down dip.
- Mud system - brought on new mud eng who worked on Lokichar basin. Confirmed using water based mud with appropriate recipe, much cheaper more practical.
- Rig move has started, rig up should be complete early next week. Then commissioning and testing new mud tank system. Mud logging services (geolog) should be onsite next week. Said mud logging was one of big let downs from M1. Wireline are at based being serviced and tested, then sent to site. Directional drilling equipment will be getting shipped soon.
- Confirmed this pad and road are all weather construction (better than M1).
- Spud date on track for mid September. Have rig for as long as we want it. Contract extension with Exalo in place for this well. Looking at effort to mob well, rig retention is paramount and everyone happy to keep rig onsite for foreseeable future (additional contract extension in place).
- Have everything in place for potential M2 sidetrack. Have mud supplier in South Africa if additional required. Also have specialist sidetrack bit.
- Potential to run liner in hole then come back later and perforate to flow test (would not need full size rig for this). Alternatively could plug off hole back to shoe (change in hole diameter) then side track and flow test straight away. Not planning to flow test immediately due to need to review data and design, cost. Likely wouldn't flow test all zones, just priority ones first. Sounds complicated (downhole pressure gauges, shutting off zones etc). Also if rig is tied up well testing then not drilling - priority is to keep drilling. Mentioned that drilling then testing immediately is big ask of junior in Zim. "This is a logistics project with some drilling in the middle of it" - said drilling is the easiest part. Once we have more certainty (i.e. discovery), will be far easier to set up longer term contracts with service providers & establish supply bases locally.
- Fluid sample - min required for discovery is one filled sample chamber. Then can assume that similar log responses in other zones indicate moveable HC. Currently have log responses, just not fluid sample.


New Seismic
- Just finished acquisition. Now working on processing (estimate till end of Nov) and interpretation. Resource estimate some time early next year.

Field Development
- Can drill through wet season, did not specify whether that was the plan
- Prospective reserve update.
- Process will be booking contingent resources then reserves. Mentioned that onced declared commercial, then on clock to develop it (due to PPSA) - usually only have set development window (eg. 20 years) - don't want to eat into this prematurely
- Plan to drill a few wells + 3D seis, then put together contingent resources and updated prospective resource (2P, 2C, 2U)
- Comparison to pre-drill resource estimate. Primarily influenced by column heights. Filter cake on M1 borehole wall was issue for pressure gradient / column height calculation. Need more pressure data to compare (i.e. to P10 vs P50 vs P90)
- Farm in / JV: how much more data is required to get serious offer / fair value offer? Demonstrating moveable HC. This unlocks running room for basin. Have already had conversations with a number of parties - some were keen to join for current drill campaign. SM was keen to complete M2 alone and deliver step change in valuation first.