REG - Tower Resources PLC - Namibia Technical Update

Tower ResourcesAnnouncement

16/06/2023 07:00

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RNS Number : 9200C  Tower Resources PLC  16 June 2023

16 June 2023

Tower Resources plc

("Tower" or the "Company")

Namibia Technical Update

 

Tower Resources plc (TRP.L, TRP LN), the AIM-listed oil and gas company with a
focus on Africa, is pleased to provide an update on activity in respect of
license PEL 96 in Namibia, covering offshore blocks 1910A, 1911 and 1912B (the
"Namibian Blocks") and, in particular, the recent basin modelling work
undertaken over the license area.

 

Tower is the operator of license PEL 96 with an 80% working interest.

 

Highlights

 

·    A basin and thermal maturity study has been undertaken within PEL 96
which has significantly progressed the understanding of the hydrocarbon
prospectivity of the license. This basin modelling study has been carefully
integrated with seismic sequence stratigraphic interpretation of the large 2D
seismic datasets and integrated with the well data within PEL96 and available
well data elsewhere in the Walvis Basin region.

·    The integrated analysis of the seismic, wells and the basin modelling
results shows clear evidence of a working petroleum system present within the
Dolphin Graben in PEL 96; in the form of oil recovered from cores in the
1911/15-1 well and direct hydrocarbon indicators (DHIs) observed on seismic.

·    The objectives of the basin modelling study were to assess the
critical elements of the hydrocarbon charging system, i.e. thermal maturity,
distribution of generative source kitchens, volumetric estimation of
generative capacity of mature source rocks, timing of generation/expulsion of
hydrocarbons and mapping of migration pathways.

·    Main conclusions of basin modelling study:

o  Generative source kitchens have been calculated and have been mapped
within PEL 96. Lower Cretaceous syn-rift sediments within the main depocenters
of the Dolphin Graben calculate as mature for main oil and late oil
generation.

o  Timing of the main and late oil generation phases calculated to be
mid-Tertiary (Oligocene) to present-day.

o  Migration pathways for oil charge have been mapped and the main foci of
migration identified. The volumes of hydrocarbons generated have been
calculated for each source kitchen.

o  The main fetch areas that are able to focus migration towards each of the
main prospects are calculated as having potentially generated oil within the
following volumetric ranges; Alpha Prospect fetch area - ca. 45 to 79 billion
barrels ("bbls") oil, Gamma Prospect fetch area - ca. 15 to 23 billion bbls
oil.

o  The potential for stratigraphic traps is recognised on the 2D seismic data
where Cretaceous reservoir targets onlap onto highs along the western and
eastern flanks of the Dolphin Graben. These potential stratigraphic traps are
located directly on several of the main migration pathways out of the
generative kitchens. These potential stratigraphic traps show similarities to
the recent major discoveries in South Africa and Namibia.

·    The Company is currently undertaking an oil seep analysis to
accompany the basin modelling work, and a review of the existing volumetric
data on the prospects and leads that have already been identified is underway.

 

Jeremy Asher, Tower's Chairman and CEO, commented:

 

"We are excited by the results of the basin modelling work and its indication
of the prospectivity of Tower's licenses in Namibia. It explains neatly the
results of the Norsk Hydro well, the source of the lacustrine oil found within
it, and the reasons why that oil found its way into that well and subsequently
migrated away from it. The conclusions indicate the potential for either of
the giant billion-barrel-plus structures in the West of the license to be
charged; furthermore, the migration pathways, coupled with the recent
impressive industry successes in drilling stratigraphic plays in the Orange
Basin to the South, enhance our interest in the similar stratigraphic leads
that we interpret on the flanks of the Alpha Prospect structure in particular.
We look forward to updating investors further as our work progresses."

 

Background

 

As part of its work programme, Tower has recently concluded a geochemical and
thermal maturity basin modelling study, the results of which have positive
implications for the prospectivity of the license and which are now being
incorporated into a play fairway analysis covering the full PEL 96 license
area.

The 1911/15-1 well drilled by Norsk Hydro in 1994 within the Dolphin Graben
encountered several potential source horizons in both the Upper and Lower
Cretaceous and has provided the most valuable and well-documented calibration
point for the basin modelling. This well has been critical for identifying the
most regionally geologically consistent input parameters for the computer
models and has provided crucial geochemical data for optimising the basin
modelling inputs, and ensuring a very close fit between the output predictions
of the computer models and the real-world measurements from the wells and
seismic data. The careful optimisation of the basin models to achieve a very
close calibration of outputs to the actual observed well data is essential to
having useful predictive model outcomes. PEL 96 (and the northern Walvis Basin
generally) is an expansive area and therefore it has taken a substantial
amount of new work to refine the models.

 

There is clear evidence of a working petroleum system present in PEL 96. The
presence of an oil-mature early Cretaceous (and/or potentially older) source
rock is proven by:

a. The presence of a light (thermally mature) oil which was recovered from
core samples taken from an Albian-aged carbonate in the exploration well
1911/15-1. The well drilled an intra-basinal high within the central part of
the Dolphin Graben. The basin modelling outputs are consistent with the
observed well data. This implies that this oil represents hydrocarbons that
have migrated from a nearby mature source kitchen within the adjacent
half-grabens during Oligo-Miocene times. Additionally, the oil samples
recovered from 1911/15-1 have biomarkers indicative of a lacustrine source (of
likely syn-rift origin), which implies Barremian and/or older early Cretaceous
source rocks. This new technical work conducted by Tower, especially the
detailed migration pathway analyses, suggests the presence of only residual
hydrocarbons was due to trap breaching, caused by later structural movement
and tilting, which spilled any accumulation to the East.

b. The presence of compelling seismic evidence of widespread direct
hydrocarbon indicators. These are in the form of large gas chimneys, where gas
is observed to be migrating up and along deep-seated faults from half graben
depocenters, and also from the presence of seismic anomalies indicating
shallow gas accumulations above and in the vicinity of the gas chimneys. These
shallow gas anomalies and gas chimneys are particularly prevalent along the
western margin of the Dolphin Graben and directly along mapped major migration
pathways, and are associated with major extensional faults that extend into
the deepest parts of the half graben basins.

The purpose of the basin modelling analysis was to assess three critical
elements of the hydrocarbon charging system:

(i) to provide an evaluation of thermal maturity of the main known source
rocks and their areal extent (i.e. the areal distribution of the generative
kitchens);

(ii) to estimate the generative capacity of the mature source rocks within the
generative kitchens within PEL96 and volumes of hydrocarbons generated; and,

(iii) to assess the timing of generation/expulsion of hydrocarbons, phase of
hydrocarbons expelled and map main migration pathways for hydrocarbons, and to
assess volumetrics of the principal fetch areas for each exploration target.

Initial conclusions:

 

The main conclusions of the basin modelling study are:

1.    The results of the basin modelling analysis, integrated with seismic
sequence stratigraphic interpretation of the extensive 2D seismic data sets,
indicate that oil-mature Lower Cretaceous source prone intervals belonging to
the early Cretaceous syn-rift phase of the basin are widespread within PEL 96
and present over much of the Dolphin Graben throughout PEL 96. Note that
additional sub-basins are present in the western part of PEL 96 that may
extend the presence of source-prone early Cretaceous, with the potential for
additional hydrocarbon generation in this area.

2.    Lower Cretaceous source-prone intervals are calculated to sit within
the oil window over a large part of the Dolphin Graben within PEL 96, reaching
Main and Late Oil Maturity Windows over much of the area.

3.    Timing of the source-prone intervals entering the main and late oil
generation windows (the critical maturity zones which account for the major
component of oil generated that has the capability to migrate) calculates to
be mid-Tertiary (Oligocene) to present-day.

4.    Migration pathways have been analysed and mapped. The main foci of
migration out of the source kitchens have been identified and the volumes of
hydrocarbons generated in each fetch area have been quantified. Note that the
basin has undergone a significant young structural tilting event (Mio-Pliocene
age) which has re-orientated several of the major migration pathways.
Therefore, it has been necessary to construct migration maps for both the
present-day and also back-strip the basin configuration to map the main
migration pathways at a time pre-dating the tilting and coinciding with onset
of main oil generation (mid-Oligocene).

5.    Source kitchens have been calculated and have been mapped within PEL
96. Several of these have configurations that would focus any hydrocarbon
migration towards several of the key prospects and play fairways (note that
each of these sub-divisions of the generative kitchen which define migration
of oil into any individual prospect or play are termed 'fetch areas').
Generally, the Dolphin Graben is more mature towards the north and therefore
the main volumes of migrations generated and migrated are in the northern
parts of the basin, i.e. within PEL 96 and especially within the northern and
central parts.

6.    The fetch areas that focus migration towards each of the main
prospects are calculated as having generated oil within the following
volumetric ranges (note that some gas and gas condensates are also calculated
to have been generated in some deeper parts of the basin and the volumetrics
of these additional generated hydrocarbons are still being assessed):

a.    Alpha Prospect fetch area - is calculated to have generated in the
range 45 to 79 billion bbls oil,

b.    Gamma Prospect fetch area - is calculated to have generated in the
range 15 to 23 billion bbls oil,

7.    Phoenix High play fairway (with potential for stratigraphic trapping
up-dip to the east) - is calculated to have generated in the range 45 to 59
billion bbls oil. Note that the ranges in volumes of hydrocarbons generated
per fetch area is in part a reflection of the late tilting of the basin which
causes a reorganisation of the migration pathways from Oligocene to
present-day and which changes the areal extent of each fetch area over time;
this therefore changes the volume of hydrocarbons capable of being focused
towards each prospect with time.

8.    The potential for stratigraphic traps with major regional onlaps of
the main Cretaceous reservoir targets are identified on the seismic data to be
located directly on several of the main migration pathways out of the
generative kitchens. This is especially interesting for prospectivity since
any oil migrating towards the western mega-high prospects, for instance, the
Alpha or Gamma Highs, must first pass through these stratigraphic trapping
areas with potential for these stratigraphic traps to be substantially oil
charged.

Potential stratigraphic traps are recognised in western areas of PEL 96 along
the eastern flanks of the Alpha and Gamma highs in both Lower and Upper
Cretaceous reservoir-target sequences. These potential stratigraphic traps
have an up-dip towards the ocean (west) architecture, similar to recent major
discoveries by TotalEnergies in South Africa.

Potential stratigraphic traps are also recognised in central areas of PEL 96
along the western flanks of the Phoenix High, and potentially the Elephant
High slightly to the South. These potential stratigraphic traps have an up-dip
to the coast (east) architecture similar to some of the major recent
discoveries further south in Namibia.

 

Next steps

 

The Company is currently undertaking an oil seep analysis to accompany the
basin modelling work, and a review of the existing volumetric data on the
leads that have already been identified. This will result in a revised
evaluation of the prioritisation, and volumetrics associated with those leads,
which the Company will share with investors in due course.

In addition to highlighting the potential of the Tower Resources Namibian
Blocks, the results of the recent technical work will provide a good
foundation in ensuring the remaining initial exploration phase of the PEL 96
work programme, including the acquisition of new 3D seismic data as set out in
the Company's work programme, is sufficiently optimised and targeted to unlock
the full prospectivity of the license.

The Company is currently finalising a technical presentation on the basin
modelling, which will be posted to the Company's website in due course. The
Company will notify investors when this is available.

 

 

Contacts:

 

 Tower Resources plc                  +44 20 7157 9625

 Jeremy Asher

Chairman and CEO

 Andrew Matharu

VP - Corporate Affairs

 SP Angel Corporate Finance LLP       +44 20 3470 0470

Nominated Adviser and Joint Broker

 Stuart Gledhill

 Kasia Brzozowska

 Novum Securities Limited             +44 20 7399 9400

Joint Broker

 Jon Bellis

 Colin Rowbury
 Axis Capital Markets Limited         +44 0203 026 2689

Joint Broker

 Richard Hutchison

 Panmure Gordon (UK) Limited          +44 20 7886 2500

Joint Broker

 John Prior

 Hugh Rich

 BlytheRay                                       +44 20 7138 3204

Financial PR

 Tim Blythe

 Megan Ray

 

Notes:

 

Dr Mark Enfield, BSc, PhD, and a member of the Board of Tower Resources plc,
who has over 30 years' experience in the oil & gas industry, is the
qualified person that has reviewed and approved the technical content of this
announcement.

 

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this
announcement via Regulatory Information Service ('RIS'), this inside
information is now considered to be in the public domain.

 

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