"Galp has made what is thought to be a significant oil and gas-condensate discovery with its keenly watched Mopane-3X exploration well offshore Namibia, opening up at least two new geological plays in the prolific Orange basin. This news, unveiled on Tuesday morning, saw the Lisbon-listed player’s share price increase 7.6% to €16.08 ($16.83) at the time of publishing. Spudded by the drillship Santorini on 2 January in Petroleum Exploration Licence (PEL) 83, Mopane-3X was drilled southeast of Galp’s Mopane-1X discovery, which targeted the initial AVO-1 reservoir. Mopane-3X, located at 18 kilometres from Mopane-1X, targeted two stacked prospects, AVO-10 and AVO-13, plus a deeper sand, in a water depth of about 1200 metres.
Preliminary data, said Galp, confirmed light oil and gas-condensate significant columns across AVO-10, as well as light oil columns in both AVO-13 and the deeper reservoir, all in “high-quality” sandstones. The reservoirs’ logs, said the operator, “confirm good porosities, high pressures and high permeabilities.” Initial fluid samples, it added, show low oil viscosity and minimal carbon dioxide and hydrogen sulphide concentrations. Galp said that Mopane-3X’s higher-than-expected pressures and preliminary results unlock further exploration and appraisal opportunities in the southeast region of Mopane. All acquired data will now be integrated into Galp's reservoir model to support the planning of potential further activities.
A proprietary 3D seismic acquisition campaign is on track to be completed this quarter, with processing of the information acquired to follow. A source familiar with Galp's latest well told Upstream that the higher-than-expected pressures encountered mean that this discovery has a strong charge system which bodes well for recovery rates. “It really sounds like this is a huge hit… certainly far larger than they expected,” the source said.
Knowledge Katti, chief executive of Mopane partner Custos Energy, said: “The stacked discoveries are emblematic of the size and potential of the complex,” adding that the discovery offers “an emerging clarity” on the multi-phase development potential of Mopane. Robert Bose, chief executive of Toronto-listed Sintana — which has a 49% stake in Custos — said: “These additional discoveries in an entirely new (play) further demonstrate the scale and quality of the Mopane complex.”
Commenting on the Mopane-3X result, Jefferies analyst Giacomo Romeo said: “Galp’s successful fifth exploration well in Namibia will be well-received after a negative reaction to the fourth appraisal well and increasing concerns around the commerciality of the broader play in the Namibia Orange basin.” The well, he said, should de-risk the in-place resource of 10 billon barrels of oil equivalent for the Mopane complex and support the case for a project expected to involve multiple floating production, storage and offloading vessels. Romeo said it also unlocks further exploration and appraisal opportunities in a new region of PEL 83."
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)