Offshore / Appraisal and Exploration
Envoi has been engaged by Tower Resources Cameroon S.A, a wholly-owned subsidiary of Tower Resources plc, to assist in finding a strategic partner to earn part of their 100% operated interest in the shallow water Thali PSC, offshore Cameroon. Tower was awarded the PSC in September 2015 for an Initial Exploration Period of 3 years, which the government has extended. The Thali PSC, (formerly known as the Dissoni PSC) covers an area of 119.2 km², with water depths ranging from 8 to 48 metres. It lies in the prolific Rio del Rey basin, a sub-basin of the Niger Delta, in which over 34.5 billion barrels of oil has been discovered to date, of which 2.5 billion barrels of oil equivalent (‘boe’) is attributed to Cameroon. This has already produced over one billion barrels of oil with estimated remaining reserves above 2,000 metres in the proven/producing ‘Shallow Plays’ estimated to be 1.2 billion boe. Substantial resource potential also exists in the Tertiary’s Miocene ‘Deep Plays’ in the area, undrilled in the Thali Block, though proven in large fields in the immediate area, including the 5+Tcf Alba and 2 Bn bbl Zafiro fields south of the Block.
The area has been explored by Pecten (Shell) and ELF (now Total) since the 1960s with several discoveries made within an earlier licence. As a result, the current Thali Block includes the Total’s Njonji-1 discovery well drilled in 2008 which encountered 35° API oil in several shallow stacked Pliocene sands. The Njonji-2, appraisal well confirmed the discovery in 2010, but was deemed uncommercial at that time before any testing, leading to Total’s strategic exit and sale of its entire Cameroon portfolio to Perenco in 2011. Perenco put the Dissoni field into production, immediately to the north of the current Thali Block, before relinquishing the rest of the licence. Tower then applied for, and were awarded the Thali Block in 2015. Since then, they have reprocessed the 3D seismic originally acquired in 1991 over part of the Block, including over the Njonji discovery. This new data has provided a more accurate definition of the Njonij structure, its closures and their commercial potential. Tower is now seeking a strategic partner to join them in funding the planned Njonji-3 appraisal well to flow test the oil in the Pliocene sands, followed by a rapid development. The Njonji-3 well is drill-ready. All long-lead items have been purchased, the site survey is completed and rig contract under negotiation.
An independent CPR completed by Oilfield International in October 2018 has confirmed an initial two-phase development could exploit the ‘mean’ 18 MMbbls contingent recoverable resources (and upside of 34+ MMbls rec) from the three primary Pliocene reservoir sands in the northern Njonji closure above 1,100 metres. Follow-on drilling could then exploit a gross ‘mean’ prospective resources of 20 MMbbls in the southern closure, which has an upside potential of 74+ MMbbls rec.
The economics show a four well ‘stand-alone’ development of just the contingent Northern Njonji resource potential is commercial. This could produce 8,000 bopd, with the proximity to local infrastructure providing rapid cash flow with recovery of exploration costs under the PSC from potential annual cash flows of >$100 million and an EMV10 of US$118 million. An additional EMV10 of US$82 million is calculated for the development of the prospective Southern Njonji resource potential. Substantial 100+ MMboe potential upside remains undrilled in the Dissoni South and Idenao East analogue prospects in the Block, immediately south of Perenco’s Dissoni field.
The undrilled deep exploration play potential in the Thali PSC offers equally large resource upside already proven on trend in the deeper Rio del Rey Basin. In addition to the Alba and Zafiro fields, the Isongo fields lie on trend to the south east of the Thali Block.