REG - Tower Resources PLC - Namibia Update and statement re: Graff-1 well

Tower ResourcesAnnouncement

07/02/2022 07:00

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RNS Number : 8129A  Tower Resources PLC  07 February 2022

7 February 2022

Tower Resources plc

Namibia Update and statement regarding the Graff-1 exploration well

 

Tower Resources plc (the "Company" or "Tower" (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 blocks 1910A, 1911
and 1912B (the "Namibian Blocks") and in particular the recent news regarding
the Shell-operated Graff-1 exploration well.

 

Tower has noted the announcements by the National Petroleum Corporation of
Namibia ("Namcor"), and also operator Shell Namibia Upstream B.V. ("Shell"),
and partner QatarEnergy, confirming that the Graff-1 well on PEL 39 has made a
discovery in both its primary and secondary targets, and proved a working
petroleum system for light oil in the Orange Basin, offshore Namibia. The
partners' announcements say that they intend to perform further laboratory
work and also intend to drill a second exploration well, to determine the size
and recoverable potential of the discovery. The Graff-1 well was drilled,
apparently without incident and in around 50 days, to a total depth of 5,376
metres in water depths of approximately 2,000 metres.

 

Other press reports have indicated that the well has been drilled in a slope
channel system with a startigraphic trap, and has encountered at least one
60-metre layer of hydrocarbons, holding an estimated 250-300 million barrels
of light oil, in an Upper Cretaceous sandstone reservoir. While the
announcements say nothing about the source rock, it appears reasonable to
infer that the light oil has been generated in Lower Cretaceous (probably
Aptian-Barremian) or possibly older/deeper source rocks.

 

Tower's net acreage position of 18,637 km(2) is believed to be the third
largest net acreage position in the Namibian offshore, after Exxon and Eco
Atlantic Oil & Gas.

 

Tower's Namibian Blocks, covering a gross area of 23,297 km(2), are in the
Northern area of Namibia's offshore, in the Walvis basin which is closer to
the border with Angola and the Namibe basin, approximately 950 kms away from
Graff-1. While this is a considerable distance, certain conclusions can
nevertheless be drawn that are relevant to our Namibian Blocks.

 

1. Initial conclusions

 

The most important point is that the Graff-1 well demonstrates conclusively
the potential for source rocks in the Namibian offshore to have been buried
sufficiently to generate light oil in substantial quantities. In the past,
this had been open to question, as the only potentially commercial reservoir
previously encountered in the Namibian offshore had been the Kudu gas
discovery, and the Lower Cretaceous source rock at Wingat-1 (about 250
kilometres to the South of our Namibian Blocks) had produced light oil but
until now no substantial oil-charged reservoir was found. The result at
Graff-1 therefore reduces the risk of all leads which may rely on similar
source rocks, even though each source rock carries its own characteristics and
the risks of migration, charge and reservoir are also unique to each case.

 

The Graff-1 well also would appear to indicate, if the press reports are
correct, that the slope channel system with a stratigraphic trap has enabled
successful migration of oil into a potentially commercial scale reservoir,
which is encouraging for further plays of the same type in both Namibia and
South Africa.

 

2. Tower's Namibian Blocks

 

This key conclusion is relevant to our Namibian Blocks because our license
area contains a large number of prospects and leads in the Cretaceous
turbidites (sandstones) and also in the Albian carbonates and early Cretaceous
clastics; and the license area also contains stratigraphic intervals that
correlate with regional Lower Cretaceous source rocks which are buried at a
sufficient depth to put them in the light oil window. We now have confirmation
that these source rocks are potentially capable of producing oil in quantities
required to charge substantial reservoirs.

 

We note that the two wells drilled by Norsk Hydro in the mid-1990s in the
Tower block 1911 already penetrated both Upper Cretaceous turbidites and
Albian carbonates, with well 1911/15-1 recovering light oil from Albian
carbonates, as well as penetrating three source rock intervals including one
in the Upper Cretaceous (which is oil-prone, but not mature) and two Lower
Cretaceous intervals. In addition to the oil potential from the marine source
rocks encountered in the Lower Cretaceous, the oil actually recovered from
well 1911/15-1 appears to be from deeper Lacustrine sources, also thought to
be Lower Cretaceous, which are clearly mature.

 

As previously announced, our Namibian Blocks contain two giant structures
(identified on the map on our website at the link below as Alpha and Gamma)
and four other substantial leads in the Dolphin Graben (identified on the same
map as leads A, B, C and D), each of which contain multiple stacked reservoirs
including Albian carbonates and Upper Cretaceous turbidites. Both Alpha and
Gamma are interpreted as giant 4-way dip closured structures with
billion-barrel potential. The Dolphin Graben Leads A, B C & D, all of
which are located directly adjacent to areas with mature source rocks, are
each estimated to hold between 250-686 million barrels of prospective
resources (arithmetically summed gross, unrisked, Pmean), based on Tower's own
initial unaudited estimates.

 

In addition to the structural plays identified above, Tower has also
identified significant prospectivity in stratigraphic plays within the
Cretaceous and Palaeogene intervals, with potential for deep-water turbidite
reservoirs interbedded with mature source rocks.

 

These various plays include leads in the slope channel system and the base of
slope/fan setting, similar to Graff and Venus respectively, although we do not
yet have enough information to say how closely analogous individual structures
may be.

 

For more information on our Namibian Blocks, please see our website at this
link:

 

https://www.towerresources.co.uk/operations/namibia/

 

 

3. Next steps

 

Tower has already been conducting basin modelling to support technical
evaluation of the leads identified to date as part of the work programme for
the Initial Exploration Period for PEL 96. We are now moving forward with more
detailed and focused geological and geophysical analysis aiming to high-grade
areas for further seismic data acquisition, and we will also be looking out
for further information regarding Graff and Venus as and when it becomes
available. Once this work is complete, we will acquire new 3D seismic data
over the most promising leads/prospects in line with our work programme.

 

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

 

"We are delighted by the Graff-1 discovery, for the Republic of Namibia and
our partners at Namcor, and also for the greater confidence that this
discovery gives us in our own Namibian Blocks. As Immanuel Mulunga, Managing
Director of Namcor, has said, this should put to rest any remaining doubts
about the hydrocarbon potential of Namibia. We hope that this discovery will
bring prosperity to Namibia, and that the further exploration and appraisal
activity it generates will also reduce costs and provide further insights to
assist all of us exploring in the area."

 

 

 

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

 Caroline Rowe

 Novum Securities Limited             +44 20 7399 9400

Joint Broker

 Jon Beliss

 Colin Rowbury

 Panmure Gordon (UK) Limited          +44 20 7886 2500

Joint Broker

 Nick Lovering

 Hugh Rich

 

Notes:

 

In accordance with the guidelines for the AIM market of the London Stock
Exchange, 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.

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