Tullow spuds Cormorant well offshore Namibia

UK independent Tullow Oil has spudded the Cormorant exploration well in the Walvis Basin offshore Namibia and highlighted by us as a well to watch in our ‘Exploration Watch: 2018 exploration wells’ report. The well is targeting resources of 125mmbbls in a basin slope Cenomanian Cretaceous fan covering 120km2. If successful, the well would open up a potential 1bnbbls in other fans for the company together with the rest of the basin for the industry, where majors have been building a position in recent years, most recently with ExxonMobil’s 30% farm in to AziNam’s PEL 44 licence immediately to the south of Cormorant. The well is one of two high profile wells to be drilled in Namibia this year, with Chariot Oil & Gas due to drill its Prospect S well from mid-October and also covered in our report.

Cormorant is expected to be a relatively simple well to drill, with minimal casing strings required so that, with current lower rig rates, it can be drilled for $35-$45m. The prospect is a turbidite identified on 3D seismic and is a stratigraphic trap that relies on a stratigraphic pinch out at the feeder. As such it has a higher geological risk, reflected in the company’s estimated COS of 15% . One of the fans that would be de-risked by success here is Osprey, which sits in PEL 30 to the north of Cormorant and in which Tullow holds a 15% WI. Osprey has been independently assessed by Gustavson for operator Eco Atlantic (32.5%) to hold gross prospective resources of 245.5mmbls.

On completion of the Cormorant well, the Ocean Rig Poseidon will move south to PEL 71 to drill Prospect S for Chariot Oil & Gas. Prospect S is targeting 459mmbbls in three separate Cretaceous sands draped over a volcanic structure. The presence of source and reservoir was established in Namibia in 2013 by HRT in the Wingat and Murombe wells (located in the PEL 82 licence, now operated by Galp and partnered by ExxonMobil) but these remain the key risks for Prospect S, which has been independently assessed by NSAI to have a COS of 29%. If successful, Chariot plans to move the drillship to drill Prospect W, which is targeting 284mmbbls

Cormorant: Tullow (35% and operator), ONGC Videsh(30%), Pancontinental (20%), Africa Energy (10%) and Paragon (5%)

Prospect S: Chariot (65% and operator), AziNam (20%), NAMCOR (10%) and Namibian BEE (5%).

Osprey:Eco Atlantic (32.5% and operator), AziNam (32.5%), Tullow (15%), ONGC Videsh (15%) and NAMCOR (10%).