More very positive news from GALP on the Mopane-1X discovery as you don't expect majors to be too enthusiastic about their discoveries, so they can leave some wriggle room if expectations not met with subsequent development drilling.
If Mopane-2X is successful in intersecting the two oil zones drilled in Mopane-1X, then the formation pressures should provide a reasonable confidence of the size of the Mopane light oil Cretaceous discovery.
And one would expect, any sell down by GALP in PEL 82 will provide a value estimate for adjoining permits, if they should contain similar oil field/s.
Galp focused on production “as soon as possible” in Orange Basin Galp raised the possibility of farming down its stake and bringing in a partner.
It currently has an 80% equity position. Galp expects to carry out a drill stem test (DST) on its Mopane discovery in March, executives have said on the company’s results call.
The Mopane-1X discovered “two significant oil columns”, Galp CEO Filipe Silva said. “We’re starting the second well,” he continued, close by in the same PEL 82.
“We have something that looks sizeable. We have very encouraging pressures, very encouraging porosity, very encouraging permeability. It’s too soon to say at this stage what the next move will be.”
By late March, Galp should have confirmation about commerciality.
The company’s work should provide a “very good view of commerciality on the reservoirs we have hit. It is highly possible that we will drill more wells within the block.”
Work at Mopane-2X is getting under way, executives continued. The well is targeting two reservoirs, in line with the first well.
Galp raised the possibility of farming down its stake and bringing in a partner. It currently has an 80% equity position. Should the company move into development, this is likely to be higher risk than the company wants. Capital expenditure for drilling in Namibia this year is around $150 million.
“We’re acutely aware of bringing production in Namibia online as soon as possible, rest assured,” Silva said. “Nothing will get delayed, we’re doing a lot of work already.”
A potential sale of equity in the block would be able to move in parallel with Galp’s de-risking work, which would include exploration and appraisal wells.
Galp has retained the Hercules rig for its Mopane work.
Executives sounded confident that they would be able to keep on drilling with the semi-submersible.
Namcor has a 10% stake PEL 82, while Custos Energy also has 10%.
PCL Price at posting:
2.0¢ Sentiment: Hold Disclosure: Held
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