Pancontinental Confirms Oil Discovery at Sunbird-1 Well Offshore Kenya

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Pancontinental Oil and Gas NL reported Tuesday that, after lengthy analysis, it has been verified that the recently completed Sunbird-1 well in area L10A off the southern Kenyan coast has intersected an oil column – the first-ever oil discovered off the East African coast. The gross oil column is assessed to be 46 feet (14 meters) thick beneath a gross gas column of 97 feet (29.6 meters) in a reefal limestone reservoir in the Sunbird Miocene Pinnacle Reef in area L10A.

The corresponding net values are 30 feet (9.2 meters) for the oil zone and 92 feet (28.3 meters) for the gas zone. The net values are calculated for the reservoir using cut-offs of 10 percent porosity (Phi) and 50 percent shale volume (Vsh). Oil and gas samples have been recovered and analyzed using sophisticated geochemical techniques. The Sunbird Reef is an ancient Miocene pinnacle reef buried beneath approximately 2,952 feet (900 meters) of younger sediment.

Pancontinental believes the results are highly significant because they are the first proof of the presence a prospective oil system in the Lamu Basin offshore Kenya. The oil and gas have been geochemically typed in detail and the prospective source rocks have been dated and characterized for use in future exploration. Analysis of the Sunbird results has been complicated by the loss of drilling mud, seawater and remedial cement pumped into the limestone reservoir during drilling operations. Pancontinental has an 18.75 percent interest in the well and block L10A. Pancontinental has 3 extensive exploration areas in this highly prospective Basin covering a total area of approximately 5,791 square miles (15,000 square kilometers), including L10A.  

The detailed oil and gas geochemical data, which are confidential to the L10A Joint Venture partners, give the age and type of the oil source rocks, as well as other crucial data that Pancontinental believes places the L10A Joint Venture in a leading position to find commercial oil offshore Kenya. The Operator of the Block L10A Petroleum Sharing Contract, BG Group, is continuing to analyze the well data and will recommend a future exploration program using the well results. Pancontinental’s CEO Barry Rushworth said the implications of the Sunbird-1 well results for regional oil exploration were truly outstanding. 

“The Sunbird-1 oil is the historic first-ever oil discovery offshore Kenya,” Rushworth said. “Furthermore, it is the only offshore oil column ever reported seaward of the eastern coastal margin of the African continent, from South Africa to the northwest tip of Somalia. “We believe that this is a play-opening discovery in Kenya’s Lamu Basin. Because of the Sunbird discovery we expect to see a significant increase in industry interest offshore Kenya. “We encountered a thick and effective seal over the top of the reef, which was an initial risk for us, and the regional follow-on implications of this are truly significant. Porosity, permeability and seal for the reservoir were all better than Pancontinental expected. “Now that we know there is a prospective oil system in the Lamu Basin and we know the important technical details, we are in a prime position to explore for larger volumes of oil over our very extensive portfolio of prospects and leads. “Pancontinental’s blocks offshore Kenya all contain Miocene Reefs, as well as numerous other types of geological targets. “The Sunbird oil discovery has allowed us to geochemically type the oil source rocks, allowing the Joint Venture to effectively plan the way ahead for further oil exploration”.

FURTHER SUNBIRD RESULTS

  • The top of the Sunbird Miocene Pinnacle Reef was reached at 5,195 feet (1,583.7 meters) sub-sea. The water depth is 2,372 feet (723 meters)
  • Below the upper oil and gas zone, indications of low Wet Gas saturation were seen, although these are not considered to be volumetrically significant
  • The age and depositional environment of the oil source rocks have been determined by geochemical analysis, and remain commercially confidential to the L10A Joint Venture
  • The presence of oil is supported by geochemical analysis of MDT samples, the pressure gradient of MDT samples, numerical modelling of the invasion of the oil zone and also fluorescence attributable to oil in samples. The reservoir zone was heavily flushed during well control operations, making determination of the oil and gas zones difficult
  • Porosity and permeability of the hydrocarbon zone were favorable overall, and were very high in parts of the reservoir as evidenced by the loss of a large volume of drilling fluid
  • Sunbird-1 was “plugged and abandoned” in accordance with the drilling program, meaning that the well has been made safe in such a way that it can be left permanently without further intervention. These measures are designed to ensure that there is no danger of leakage of oil or gas within the well or to the sea floor

FUTURE EXPLORATION
The L10A joint venture is considering the details of follow-up exploration activities after the Sunbird-1 oil discovery.

The Sunbird discovery has yielded important details of the oil system in the Lamu Basin, that are held confidential by the L10A joint venture, including the age and depositional environment of the source rock and the timing of the generation of the oil phase.

L10A covers a variety of play types, prospects and leads. Many of the prospects have been mapped using the two 3D seismic surveys carried out by the joint venture. The Sunbird Prospect is one of an inboard cluster of Miocene reefs. Outboard prospects include Tertiary and Cretaceous channels, large anticlinal complexes and Cretaceous and Tertiary fault-bounded prospects.

Other offshore Kenyan activity includes an exploration well to be drilled by Anadarko, as recently announced for later in 2014. 

L10A CONSORTIUM
The Kenya L10A consortium consists of:

  • BG Group (Operator) – 50.00 percent
  • PTTEP – 31.25 percent
  • Pancontinental – 18.75 percent

PANCONTINENTAL INCREASES INTEREST IN L10B
Pancontinental advises that it has increased its interest in license L10B, immediately to the south of L10A. The increase in interest is subject to the completion of documentation; however Ministerial approval has already been given.

The Kenya L10B consortium now consists of: 

  • BG Group (Operator) – 75.00 percent
  • Pancontinental – 25.00 percent

ABOUT PANCONTINENTAL
Pancontinental Oil & Gas is a petroleum (oil and gas) exploration company based in Perth, Western Australia and listed on the Australian Securities Exchange (ASX: PCL). With a focus on Africa and Australia, it has excellent exposure to a range of high potential oil and gas targets. High levels of project equity, together with Pancontinental’s modest market capitalization, mean that the Company is very well leveraged in the event of exploration success. Pancontinental has interests in three exploration licenses offshore Kenya: L10A, L10B and L6.  Pancontinental has a 40 percent interest in the offshore section of license L6 and 16 percent in the onshore portion, an 18.75 percent interest in Kenya license L10A (Sunbird) and 25 percent in L10B. Co-venturers in these three Kenyan licenses (although not in each licesce) are BG Group, PTTEP, and FAR Limited. Pancontinental holds a 30 percent free-carried interest in offshore Namibia license EL0037, where Tullow Oil has recently completed a 3D seismic program as part of its farmin agreed in September 2013.

 

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