Calima picks up hot Namibian oil play
Calima Energy’s uncanny ability to sniff out interesting looking projects in the oil and gas space has once again been demonstrated, with the company picking up a big exploration block in an emerging off shore oil basin in Namibia.
The securing of the new block follows a surge in investment and exploration by the likes of Exxon and Total in the region, which will see a number of wells drilled on adjacent permits.
The Perth-based explorer told the ASX this week that the Namibian Government had granted Calima a 56% interest and operatorship of exploration block 2813B, covering 5,433 square kilometres of the emerging oil play in the Orange River Basin.
Over the past six months, the basin has attracted a surge of investment from the likes of Exxon, Total and India’s ONGC following breakthrough discoveries relating to the presence and likely distribution of oil source rocks.
These discoveries have been real game changers for the Orange River Basin, which is on the same South American-African rift margin that produced the prolific oil fields offshore from Brazil and West Africa. Until recently, it was wrongly believed to be gas-prone.
Calima’s highly regarded management team, led by Alan Stein and Jonathan Taylor, probably understand Namibia’s potential better than most. As founders and executives of Fusion Oil & Gas and Ophir Energy, they have already discovered more than two billion barrels of oil equivalent in the deepwater basins on both sides of Africa.
Calima has secured a big footprint in the middle of all this action with a low cost of entry. Over the next four years, Calima and its partners (Trago Energy with 20%, Harmattan Energy with 14% and NAMCOR with 10%) have a minimum investment obligation of only US$2 million.
Managing Director, Alan Stein, said: “We are tremendously excited by the exploration potential of this acreage and are delighted to have been able to secure the opportunity at a time of increasing industry interest and activity in the region. This offers us participation in a world-class exploration play with only a modest initial investment in new seismic data.”
“There are a number of exploration wells due to be drilled in adjacent acreage, which will provide valuable information to assist Calima’s forward investment strategy.”
The Namibian project has echoes of Calima’s strategy at its flagship Montney project in Canada. The company last year executed a ground-floor entry into what has since emerged as one of North America’s most coveted shale liquids/gas basins.
Calima has quietly assembled a material land position in the Montney at a massive discount to the prices now being paid for acreage around it.
The company’s latest Namibian project looks to be straight out of management’s strategic playbook and it will be very interesting to see what comes of it.