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88 Energy takes aim at Namibian oil and gas closures

88 Energy is set to acquire 200 line kilometres of 2D seismic in Namibia. Credit: File

88 Energy (ASX: 88E) has earmarked the middle of this year to begin shooting a 200-line-kilometre 2D seismic survey over 10 prospective oil and gas closures picked up by airborne gravity data in Namibia’s Owambo Basin.

Management says the closures are also supported in part by existing 2D seismic data, in addition to soil gas sampling that validates the existence of a hydrocarbon-producing source rock.

The company says the new seismic data could lead to drilling as soon as the first half of next year as it dials in on prospective closures within its vast 18,500-square-kilometre claim in what is known as “Petroleum Exploration Licence 93 (PEL 93)”. The license sits on the northern border of Namibia and shares a boundary with Angola – an African nation famous for its oil production.

Owambo is one of the globe’s last remaining onshore frontier petroleum basins and has seen an exploration rush of late as companies compete for a maiden resource.

Nearby operator ReconAfrica plans to drill three or four Owambo wells about 200km east of 88 Energy’s ground, with the first expected to spud in the middle of this year. The wells are expected to be placed in prospects defined by two distinct regional plays, focussing on the shallow Karoo and deeper, largely untested Damara formation reservoirs.

88 Energy says that given the depth, modelled maturation, geological age and geochemical data from wells and seeps, the hydrocarbons in ReconAfrica’s ground are expected to be both light oil and gas, trapped in a series of north-west-trending leads on the Damara fold and thrust belt fairway.

Management says the seismic acquisition on its ground will progress its technical understanding of the site’s geology. Conveniently, the survey has already been paid for as part of the company’s farm-in agreement with Monitor Exploration Namibia to earn an initial 20 per cent working interest in PEL 93.

88 Energy says it can earn up to a 45 per cent non-operating interest in the ground via its existing three-stage farm-in agreement.

Prior to the company farming in, the Namibian acreage was operated by a joint venture (JV) between Monitor Oil and Gas Exploration Namibia (MELN) with 75 per cent, private Namibian company Legend Oil Namibia with 15 per cent and the Namibian Government’s National Petroleum Corporation of Namibia (NAMCOR) holding the remaining 10 per cent.

Now, with the working interest transfer for phase one of the farm-in completed to include 88 Energy in the JV at 20 per cent, MELN’s hold has dropped to 55 per cent, while the interests of NAMCOR and Legend remain unchanged. MELN will continue as the project’s operator.

The Owambo Basin is fully-fledged frontier oil and gas hunting ground that has been subjected to only sparse historical exploration. That is likely to mean all eyes will be on ReconAfrica’s drilling efforts to see what the Namibian elephant country has to offer, ahead of 88 Energy’s own drilling push next year.

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