Australia-listed junior Pancontinental Energy has identified two potential oil prospects in its Orange basin licence offshore Namibia, where Woodside Energy has until 18 May to exercise a farm-in option. While waiting on Woodside’s decision, Pancontinental has been undertaking its own interpretation of about 6600 square kilometres of recently acquired 3D seismic data over Petroleum Exploration Licence (PEL) 87, which lies directly north of Galp Energia’s huge Mopane discovery in PEL 83. Based on these studies, the company’s efforts are now focused on two Lower Cretaceous exploration leads — called Oryx and Hyrax — within the far bigger Saturn complex, which cover a combined area of up to 1385 square kilometres. Responding to this news, which was published on 30 January, Pancontinental’s share price had, by the close of play on 31 January, risen 12.5% to A$0.018 (US$0.11).
In a quarterly operations update heavy on sub-surface detail, the operator said these leads are interpreted to have “good reservoir potential” in turbidite sandstones and at an ideal location to receive hydrocarbon charge from the underlying Kudu shale source kitchen. They also exhibit what are called Class 2 amplitude-versus offset (AVO) anomalies, which are an indication of the properties of rock and, potentially, what type of fluid it holds. Oryx and Hyrax are interpreted to be within the oil maturity window and are believed to be predominantly stratigraphic traps. Oryx exhibits AVO anomalies at three levels and structural closure at one of the prospective levels, while Hyrax exhibits an AVO anomaly at a single level and has “a degree of structural control” and dips gently to the north-west. These AVO responses, said the operator, are believed to be consistent with major discoveries on-trend to the south.
In addition, the junior player said based on AI-generated sub-surface modelling, it “regards the geological risk associated with reservoir presence as having been mitigated to a considerable degree.” Pancontinental will now focus its efforts on determining estimates of prospective resources and the chance of drilling successes. Pancontinental currently has a 75% stake in PEL 87, with local player Custos Investments on 15% and state-owned Namcor holding 10%. Woodside has an exclusive option to take a 56% stake which, if exercised, would leave Pancontinental holding 19%. Pancontinental itself has an option to acquire a 1% stake from Custos.
PCL Price at posting:
1.8¢ Sentiment: Buy Disclosure: Held
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