Somalia | Economy and Infrastructure News

[Constantine MMX]

Potentially 19.9 billion barrels in those two blocks alone? I'm really beginning to wonder how much really lies underneath Somali soil. Former president Siad wouldn't have managed to get a half a dozen big-time global Oil companies to sign contracts with him if the huge potential wasn't there.

Red Emperor and Range Resources prepare for a potentially transformational phase in their development.



Thu 12:12 pm by Ian Lyall

Earlier today we heard the Mukhiani-1 well in the former Soviet state of Georgia had been successfully spudded.

As the drill-bit began turning it marked the start of an exciting and potentially transformational period for the two AIM-listed companies involved in the project.

Range Resources (LON:RRL, ASX:RRS) and Red Emperor Resources (LON:RMP, ASX:RMP) respectively own 40 and 20 per cent of two onshore blocks in the country covering 6,500 square kilometres.

The Range/Red Emperor collaboration doesn’t end here. The pair have identical 20 per cent stakes in a high impact exploration project in Puntland, a semi-autonomous region of Somalia.

For Range, Georgia fires the starting pistol on a drilling programme that could, if all goes to plan, elevate it to mid-cap respectability.

“(It) is entering a potentially transformational phase in its development,” said Edison analyst Peter Dupont in a recent research note.

“Over the next four months Range has three high-impact exploration wells scheduled in Puntland and Georgia plus a development well in Texas.

“Near-term, Range is very much a play on the outcome of the high impact drilling projects, but investors should not lose sight of the Texas and Trinidad assets, which offer both excellent cash generating and development potential.”

For Red Emperor success in Georgia and and Puntland will be key to narrowing the valuation gap between itself and Range.

While Range has more bells and whistles – including producing assets in Trinidad and Texas – there is still a very strong case to be made that Red Emperor’s market cap of £38 million should be a little closer to Range’s £230 million price tag than it currently is.

“Over the last 18 months Range has really been the darling of the market over here in the UK,” Red Emperor managing director Greg Bandy told Proactive Investors recently.

“They have gained a great deal of traction and success, and a lot of the interest has been around the assets (Puntland and Georgia) that we have also got.

“We are on AIM because Range has shown there is a large appetite for these assets over here.”

In Georgia the Mukhiani-1 well is targeting the Vani-3 prospect, which was estimated to have between 41.7 million and 115.2 million barrels of oil-initially-in-place (P90 - P10).

It is expected that Mukhiani-1 will be drilled to a depth of 3,500 metres within 45-55 days. After drilling Mukhiani-1 the rig will move on to spud a second exploration well.

Range completed 410 kilometres 2D seismic on the Georgian acreage which revealed its huge potential.

From this work the independent consultant RPS Energy identified 68 potential structures containing an estimated 2.045 billion barrels of oil‐in‐place.

Puntland, meanwhile, could be of a different order of magnitude again.

The exploration area is 40,000 square kilometres in total and focuses on the highly prospective Dharoor and Nugaal valleys, which potentially contain 19.9 billion barrels of oil in-place. The pair’s joint venture partner and operator is Africa Oil Corp. (CVE:AOI).

Drilling here is expected to get underway at some point this quarter with a two-well exploratory programme planned.

It is thought the first well will be on the Dharoor Block about 120 kilometres west of the Indian Ocean shoreline and roughly 200 kilometres south-east of the principal Gulf of Aden port of Boosaaso.

It is expected to be relatively deep at 4,000-5,000 metres and will target the Upper Jurassic horizons.

Reflecting the depth, gross drilling costs will be substantial at about US$25 million. So both companies will need to look closely at their financing options.

“If we get some definitive news on the drilling timetable and a rig being mobilised then we probably hit the market to cover this cost,” Red Emperor’s Bandy revealed recently.

That said, the company has around A$14 million in the bank, which will fund the imminent two-well programme in Georgia with probably enough left over to meet the costs of the first Puntland well.

“We don’t want to drill three wells with no cash in the bank afterwards,” added Red Emperor’s executive consultant Tony King.

“We want to be fully buffered with some cash underpinning the business. We’ve got that at the moment.”

The reaction to today’s news was somewhat muted with shares in Range up 1.12 pence at 56 pence, and Red Emperor off 0.12 pence at 26.88 pence.

However the importance of today’s release shouldn’t be under-estimated. - Source

[Janub]

The company Red Emperor is trumping Puntland on their website.

http://www.redemperorresources.com/I...t/default.aspx

Looks like they're drilling for 300 million barrels in Quarter 3 of 2011. This is on an entirely different level.

http://af.reuters.com/article/invest...75L0JZ20110622

[Xusein]

I heard about this too. I wonder if they are traded publicly.

With current oil prices, that find is potentially worth $29 billion!!

[Janub]

Speaking of trading, I'm thinking about buying shares. JP Morgan of Australia is the single largest shareholder, HSBC also has shares - JP bought $3 million in shares. This looks promising.

They're listed on the Australian Securities Exchanges or ASX, and are soon to be listed on London's junior AIM market.

[Xusein]

Thanks.

The potential rewards are big. I just hope this goes further than Africa Oil.

[Janub]

African Oil is backing this whole operation, they've been trying to gain traction for the project and its well on its way.

http://www.iii.co.uk/articles/16249/...nd-red-emperor

Looks like the first well in Georgia's been dug - next destination Somalia.

[Ras Siyan]

Wow!

[Camellete]

Originally Posted by Constantine MMX

Potentially 19.9 billion barrels in those two blocks alone?

That's really amazing. I really hope they use it wisely like the emirates and help benefit our people and country.

[Xusein]

I am staying optimistic but I will reserve my judgment until oil is actually exploited...

[Janub]

9 Days to go according to Africa Oils earlier press release citing a July 27 date for the first well.

[Xusein]

Well, I hope Puntland has a contingency plan in place for this potential windfall, or it could get ugly.

[Janub]

I honestly don't think they know how much money is in this, they're not ready for it at all. They've got no sort of petroleum agency, nothing in place even in terms of political infrastructure to deal with the scenario. Its that situation again of the Saudis who didn't even know what oil was but the Brits and Americans were just feeding them. I think Faroole & Co. just expect the White explorer men to pay up at the end of the day, there is no plan in place at all; they don't seem to know the seriousness of it all. You can't expect anyone, let alone Somalis to ever be ready for something of this magnitude.

[musa90]

Originally Posted by Janub

9 Days to go according to Africa Oils earlier press release citing a July 27 date for the first well.

Finally

[juzme123]

h h

AFRICA OIL CORP.

The company holds two blocks in Puntland, Somalia: the Nugaal Block and the Dharoor Block.

Block Summaries
Country Concession Acreage WI
Somalia Dharoor 14,424 km² 45%
Nugaal 24,908 km² 45%


Somalia Map



The Nugaal and Dharoor Blocks are located in the Nugaal and Darin Mesozoic basins in northern Somalia. The Mesozoic basins are interpreted to be extensions of the Marib-Shawba and Sayun-Masila Basins of Yemen. Prior to the opening of the Gulf of Aden in the Oligocene-Miocene, these areas were contiguous and similar sedimentary sequences and structural styles are likely.

Cretaceous basins rifted apart beginning 16-18 million years ago






These concessions are very large and, with only 5 wells drilled, the area remains one of the least explored areas in North Africa.

The Nugaal Basin covered by the Nugaal Valley Block has been identified as having reservoir, source rock and trap potential. International oil and gas companies conducted exploration in the late 1980's in the region. During this exploration phase, a grid of 2D seismic was shot perpendicular to the axis of the rift system in the Nugaal Basin. Based on interpreted maps this data shows a number of large, closed, fault-controlled structures.

In addition, surface geology identified a number of oil seeps along the main basin-bounding faults. Wells drilled on the identified structures encountered numerous oil shows, however, the wells (Nugaal-1 and Kalis-1) did not reach the main exploration target.

The basin fill is extremely thick, with more than 10,000 feet of sediments in some areas. The main target reservoir is the Jurassic-aged sandstones belonging to the Gabredarre Formation. These reservoir sandstones overlie the organic rich shales and marls of the Uarandab Formation, which is thought to be the source rock for the oil seeps observed along the boundary faults. The secondary reservoirs include the deep marine sandstones and shallow marine carbonates belonging to the Upper Cretaceous Gumburo Formation. The marine sandstones of the Jesomma Formation, also Upper Cretaceous in age, are also potential secondary targets. The Jesomma and Gumburo have isopach thicknesses of approximately 1,350 and 2,450 feet, respectively.

The indications from the limited number of wells drilled in the basin are that the basins appear to be oil-prone.

Source: http://www.africaoilcorp.com/s/Somal...eportID=352284

[juzme123]

h h

AFRICA OIL CORP. East Africa Exploration



The Company's assets in Kenya, Ethiopia and Somalia are world-class oil exploration projects and contain significant resource potential.

Africa Oil holds operated and non-operated blocks in East Africa that contain under-explored plays in basins that have proven and productive analogues, or where the petroleum system is calibrated by existing well and seismic data. The current seismic and well database provides sufficient information to identify a large number of prospects and leads. Some of the prospects and leads have the potential to target multiple stacked plays. Other prospects and leads will test only single plays, but with the potential to test stacked-pay.

World-Class East Africa Oil Exploration Play



In Somalia (Puntland), the Darin and Nogal Basins are analogous to the proven and production Marib-Shabwa and Sayun-asila Basins of Yemen. These were contiguous prior to the opening of the Gulf of Aden. Therefore similar plays, prospects and leads likely exist in Somalia. This observation allows this area to be calibrated by the better understood Yemeni basins.

In Kenya, Block 9 and Block 10A are located in the Anza Graben. This is a Mesozoic basin related to similar Mesozoic basins of southern Sudan (Muglad Basin) where the petroleum system is proven and productive. The Muglad Basin is an analogue and provides calibration for the analysis of the prospectivity of these licenses. Block 10BB is located southeast of the Anza Graben Block 10A. The block is positioned within the eastern branch of the East African Rift analogous to recent discoveries made by Tullow Oil and Heritage Oil in Uganda within the western branch of the East African Rift.

Block 10BA is located in the northwestern part of Kenya within the Kenya Rift, which is part of the East African Rift System.The Block includes onshore areas to the east and west of Lake Turkana and offshore portions of the northern two thirds of Lake Turkana. Within the Block are several sub-basins and structural fault blocks that are considered part of the Kenya Rift. The Cretaceous age Anza Graben may extend west of Block 10A to underlie the Tertiary age rift system and could add deep exploration targets. Sub-basins include Lake Turkana North, Lake Turkana Central, Lodwar North and Kerio North.

In Ethiopia, the Ogaden Basin is within a proven hydrocarbon setting, however, to date no commercial production has been established. Oil, gas and condensate discoveries indicate that there is a complex petroleum system. The limited available data in this under explored area indicates that there is a wide range of potential petroleum type and volumes in this basin.

The Africa Oil blocks are all located onshore in the north of East Africa (Horn of Africa). All of the blocks are sparsely explored with only limited well and seismic data available to constrain the petroleum system and prospectivity. However, there is sufficient data on the blocks to demonstrate that multiple petroleum systems are developed within each block.

Block Summaries

Country Concession Acreage WI
Somalia Dharoor 14,424 km² 45%
Nogal 24,908 km² 45%
Ethiopia 2 & 6, 24,420 km² 55%
7 & 8, 23,162 km² 55%
Adigala 27,200 km² 50%
South Omo 29,465 km² 30%
Kenya 10A 14,748 km² 30%
10BA 16,205 km² 50%
10BB 12,675 km² 40%
9 23,700 km² 66.7%
12A 15,389 km² 50%
13T 8,429 km² 50%
Mali 7&11 72,614 km² 25%

Source: http://www.africaoilcorp.com/s/Opera...eportID=352319

[juzme123]

SOMALIA, SURROUNDED BY OIL



Source: http://www.africaoilcorp.com/s/Opera...eportID=352319

[Janub]

^ Nice stuff!

Looks like Iskushuban area is going to be the site of drilling. The locals there chased away Range Resources not long ago but Faroole has built a tight security apparatus for the area.

[Xusein]

Sooo did they start drilling yet?

[Janub]

A lot of strange stuff is going on in PL in dealing with this situation. Rumors are saying that drilling work is underway and that PL told told the drilling companies to throw the public off and announce a later date, September. The latest interview with Range Resources director says that Q3 will be mobilization and Q4 will be spudding. From what I hear, there is extreme caution being taken and very heavy security being provided by unknown sources. They are throwing around fake dates across the board and doing everything undercover and docking at night. The equipment mobilization and landing information is out there but it wouldn't be fair if I posted the details - the shipping company is Indonesian and the rig is extremely heavy is what I can tell you for now, and it landed in Bosaso in mid June. What's fact is that the equipment was processed in part in Sharjah and the rest on a different shipment in Suez and its final destination is Bosaso Port. There was an armed escort paid for by the drilling team (or PL, no clue) and followed the parts from Sharjah. None of this information is being published or available but those in the inside crowd know well, I'm lucky to know a few in Bosaso and Dubai. The plan is to make a surprise announcement about spudding, or in a more extreme scenario we'll hear about oil if they wait 2 months for the drill to go deep enough to announce anything. Do not expect news on any Somali mediums anytime soon, there's a tense game at play between PL and Africa Oil in how they'll pursue their mission without attracting attention. Its a lot more private than I thought it'd be, I expected the news to be buzzing like the last time when every reporter in the vicinity made their way to the convoy and documented everything from the landing at Bosaso to the surveys in Bari - it'll be the opposite this time.

This is the latest interview, where the director reiterates the new date, a day after a skirmish in Ufeyn between oil teams & PL and a local clan militia.

http://www.stockopedia.co.uk/content...q3-2011-58505/

[Xusein]

Can't say that Im surprised. Let's face it, there is no Somali adminstration poltically mature enough to deal with the issues of oil. I never took the date seriously. This is not a dig against Puntland, I would say the same about SL.