LONDON (ShareCast) - (Sharecast News) - Global Petroleum has signed a petroleum agreement to acquire Block 2011A offshore Namibia, it announced on Wednesday.
The AIM-traded company said it would hold an 85% interest in the new block as operator, with state oil company Namcor and local private company Aloe having carried interests of 10% and 5% respectively.

It said Block 2011A is located in the northern Walvis basin, immediately to the east of Global's current licence, PEL0029, which comprises Blocks 1910B and 2010A.

The combination of the two licences would give the firm an aggregate of 11,608 square kilometres offshore northern Namibia, making it one of the largest net acreage holders in the region.

Its board said it believed that Block 2011A contained the same plays as those detailed in the competent person's report for PEL0029, which was published in January.

The Repsol-operated Welwitschia-1A well, which was drilled in the western part of Block 2011A in 2014, primarily targeted upper cretaceous sands on the crest of a large structure, but did not encounter a reservoir.

However, Global said it believed there was "significant prospectivity", similar to that in PEL0029, in the deeper Albian carbonates, which Welwitschia-1A did not reach.

The company said it also believed that there was additional prospectivity in shallower upper cretaceous and tertiary reservoirs on the eastern flank of the Welwitschia structure.

Those reservoirs had been proven by wells to the north-east and south-east of Block 2011A, with the cretaceous being a target in both of the wells to be drilled in the third and fourth quarters by Tullow and Chariot respectively.

Global said drilling on Tullow's Cormorant prospect in Block 2012B recently started.

The Cormorant well is approximately 40 kilometres from Block 2011A, and the Tullow block was contiguous with the south-east corner of Block 2011A.

Cormorant was ranked by Wood Mackenzie as one of the "15 most anticipated conventional wells in 2018'', the board highlighted.

It explained that, aside from the wider prospectivity of its new acreage, the company was expecting that the play to be tested by the Cormorant well extended into Block 2011A, and so positive results from Cormorant should provide Global with "significant" read across.

Further south, Chariot's Prospect S well was due to spud later in the year where a successful outcome should further enhance the oil and gas industry's focus on offshore Namibia.

Under the Block 2011A work programme, in the first two years of the initial exploration period, Global said it would carry out various studies and would reprocess all existing seismic in the licence area, which included a 3D seismic data survey shot in the western part.

The studies and reprocessing would enable the reservoirs in the Welwitschia structure and elsewhere in the acreage to be mapped with more confidence, and the leads to be identified more accurately.

At the end of two years, Global said it had the option either to shoot a new 2,000 square kilometre 3D seismic data survey in the eastern part of Block 2011A, or alternatively to relinquish the licence.

"It is clear that oil and gas industry interest in offshore Namibia has accelerated greatly in recent months and we are therefore extremely pleased to have succeeded in what has been a long-term aim for the company - acquiring Block 2011A adjacent to our existing acreage," said Global Petroleum chief executive officer Peter Hill.

"Block 2011A is situated in an area of offshore Namibia which is considered by Global and the industry to be highly prospective, as evidenced by recent farm-ins involving major NOCs and IOCs, and especially by the Cormorant well currently drilling close by.

"Our immediate obligations can be completed at relatively low cost to us, and the potential advantages of read across from drilling activity by other industry participants are clear."

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