As you can see...the pre-drill water contact was assumed to be similar to that of the Songo Songo field (upper dashed red line)...and the assumed hydrocarbon target shown in dark blue.
With the GWC 30m lower than expected however (solid red line), we can assume a significant potential impact on the likely accumulation size, one way or the other. Whilst the southern target (Kiliwani – shown on the right), will not be greatly effected, the Kiliwani North Structure will see a major field size upgrade result. Also, depending on the formation contour plan, it is possible the Northern Kiliwani structure spills over into the southern accumulation, as shown in light green in the image above in both the section and plan at the bottom of the image.
Image 2…KEY’s likely post drill prognosis.
In this image, I have adjusted the Neocomian formations to below the GWC at the first drill location, as per the post drill disclosure from KEY and Aminex. In this scenario, it is highly likely Kiliwani-1 was simply poorly placed…no doubt due to less than accurate seismic and fact their life was not made any easier by performing a directional drill from the nearby Island.
As is clearly suggested in the image, the first drill (Kiliwani-1 drilled to 2570m), may well have missed the outer northern flank of a somewhat reduced mapped closure…again, the result of less than perfect seismic. If so, then the main Kiliwani target is still viable, especially given the success in Kiliwani North!
The following image shows the adjusted formation locations for each well, from pre to post-drill analysis as per the drilling results communicated to the market buy KEY.
Image 3…Pre and post drill likely formation locations.
I remember reading somewhere that the Neocomian sands were hit higher than expected in Kiliwani North-1 (remembering they were hit significantly lower than expected in Kiliwani-1)…combined with the lower GWC, we really are looking at a potential multiple increase in likely field size for the northern structure.
How all this impacts the overall field size however…and whether the central and southern Kiliwani structures connect with the northern structure (or not)…is yet to be seen.
Clearly however…obtaining more reliable sesimic at this point is a real priority!
So…my view at this stage is basically that the first drill (Kiliwani 1) was a dud for one of three reasons…
1. As stated by KEY, the Neocomian Sandstones were intersected low to prognosis and ultimately, below the water contact. This effectively rules out the occurrence of hydrocarbons at this location…the obvious conclusion here would be that the seismic was out, or at least the interpretation thereof was wrong?
2. Alternatively, the first Kiliwani directional drill was basically a dud…doh!...which missed the high of the target zone (above the water contact) and instead intersected down dip, low to the likely charged zone and below the WGC. I find it interesting there has been no mention of water contact depth in this first well, although being directional and reliant on the accuracy of down-hole surveys (which can give misleading readings due to hydro/magnetic influences from background), then perhaps it is understandable they have not discussed the exact water contact level here?
It may well be the same as Kiliwani North 1…or indeed that of the Songo Songo field…or different again?
3. Finally, given the seismic is likely wrong, it is possible they simply drilled in a dead zone (either a result of physical or mechanical influence), between the two accumulations (Kiliwani and Kiliwani North)…again, the angled directional drilling would not have helped any here.
So…the basic premise is that either Kiliwani North is contiguous with the Southern Kiliwani accumulation and the first drill (dud) was simply an aberration…or…they are not contiguous and the first drill simply targeted a dead zone between two separate accumulations as a result of poor seismic data.
Once again however…as can be seen in the cross section, the difference between the pre-drill assumed water contact and post drill 30m lower reality, has a significant impact on likely field size…anything from an approximate tripling (double the depth on Kiliwani North and you roughly triple the volume due to the dome shaped closure), to a potential spilling out of the mapped closure into the previously drilled southern Kiliwani structure, in which case, the upside would be significant.
All this potential upside...from one potential field...in one small corner...of one of their Tanzanian leases...lol...and we have not even looked at anything else yet?
Cheers!
KEY Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
(20min delay)