Annual Report 2010 - Ophir Energy

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16 Ophir energy plc | 2010 ANNUAL REPORT BUsiness review | OPERATiONs REviEw Mbeli, ntsina, Manga and gnondo Blocks, gabon Overview The Mbeli Marin, Ntsina Marin, Manga Marin and Gnondo Marin blocks are situated west and north of the petroliferous Ogooué Delta complex. The Ogooué Delta complex is a proven hydrocarbon province, where over 2,000MMbbl of oil and 900Bcf of gas have been discovered since the 1960s. LEGEND Ophir Well Existing Oil Discovery Existing Gas Discovery Existing Oil & Gas Discovery Existing Oil, Gas & Condendate Discovery Interests Mbeli Marin Ntsina Marin Manga Marin Ngollon-1 Gnondo Marin Frake Noir-1 Post Gentil Figure 6 - Mbeli, Ntsina, Manga, Gnondo Blocks - Gabon The Group was awarded a 100% interest in the four deepwater blocks on 16 March 2005. Upon the commencement of production from a field within each of the blocks, the Government of Gabon will automatically receive a 10% participating interest in three of the blocks (Gnondo, Ntsina and Mbeli) and a 15% participating interest in relation to the Manga block. The Group is in advanced farm out negotiations with respect to the Mbeli and Ntsina blocks. Exploration and appraisal Gabon The Group has carried out an extensive review of the regional petroleum geology. Significant progress was made in understanding the source and migration risks, reservoir distribution and trapping mechanisms and a variety of prospect types were identified across all four blocks. The second exploration period for Ntsina and Manga commenced on 14 September 2007 and the Group drilled two independent play types in late 2008 using the Deep Venture drillship. Frake Noir-1 was drilled in Ntsina and Ngollon-1 in Manga and fulfilled the PSC work obligations for the two permits. Although these wells did not intersect live hydrocarbon columns they significantly improved the Group’s understanding of the petroleum system within the blocks. Whilst the drilling campaign was being carried out, extensions to the first term were granted for Mbeli and Gnondo and the exploration period for Gnondo and Mbeli commenced on 14 September 2009. Following assessment of the drilling results, together with continued regional play system analysis, the Group has switched the focus of exploration efforts to the pre-salt sedimentary section. In 2009, the Group carried out a 300km 2D seismic survey to test the imaging ability of deep tow, dual receiver long cables. The objective was to test this new acquisition method to image the sub-salt stratigraphy. The outcome was encouraging and as a result, the Group proposes to acquire a 3D seismic survey specifically tuned to image the pre-salt sedimentary section. To complement the new seismic data, the Group acquired a 2,000km 2 marine gravity gradiometry survey over Mbeli and Ntsina early in 2010. Gradiometry is a three-component gravity acquisition method which provides a significant improvement in data fidelity over standard gravity methods. The Gabon survey produced excellent results and has provided valuable information on the structure and thickness of the pre-salt sedimentary section. The Group made application to the Gabonese authorities to amend the Mbeli and Ntsina PSCs, to extend the second exploration period in respect of those blocks for three years from the signature date of the amendments and modifying the work programme in both the second and third exploration periods to facilitate exploration of the pre-salt play offshore Gabon. The Group has received verbal approval of the extension request and awaits formal written confirmation. A total of US$6.8 million was written off the carrying value of capitalised exploration relating to Gabon PSCs for reasons of impairment. (Refer notes 9(ii) (a) and 9(ii) (c).) Forward plan Following completion of the proposed farm out agreement the Group intends to acquire a minimum of 2,000km 2 of 3D seismic data over the Mbeli and Ntsina blocks specifically designed to image the pre-salt sedimentary section. This data will be used to further define the structural leads already mapped beneath the salt and to determine the optimal location to drill exploration wells. The Company plans to invite expressions of interest from suitably qualified companies to farm in to the Gnondo and Manga blocks to pursue the various prospects and leads already mapped within these blocks.
Agc profond, Agc Overview AGC is a joint commission set up by the Governments of Senegal and Guinea-Bissau to administer the maritime zone between the two countries. The AGC Profond block (“AGC Profond”) consists of the deepwater portions of two blocks previously known as Cheval Marin and Croix du Sud. LEGEND Ophir Well Existing Oil Discovery AGC Profond Rufisque Offshore Sangomar Offshore Sangomar Deep Offshore Kora-1 Dorne Flore Field Sinapa Field Gambia Senegal Guinea Bissau Guinea In late 2008, a CSEM survey was conducted. The results were encouraging and have highgraded a number of prospects. The joint venture decided to drill the Kora Prospect in the northern part of the AGC Profond area. The Kora Prospect is a four-way dip-closed structure and is one of several such structural closures within the AGC Profond area. Forward plan The semi-submersible rig Maersk Deliverer has been contracted to drill the Kora Prospect early in 2011. The Kora Prospect has several stacked reservoir objectives over a robust four-way dip-closed structure which has the potential to contain several hundreds of millions of barrels. Marovoay Block 2102 - Madagascar Overview In July 2010, the Group acquired from Wilton an 80% participating interest and operatorship of a PSC relating to the Marovoay Block 2102, onshore Majunga basin in Madagascar (“Madagascar PSC”). 17 Ophir energy plc | 2010 ANNUAL REPORT BUsiness review | OPERATiONs REviEw Figure 7 - AGC Profond - AGC Interest The Group has an 83% participating interest in the block during exploration with the state owned entity, l’Entreprise AGC S.A. (“Entreprise”), holding a 12% interest and having a right to back-in for a further 5% interest following a declaration of commerciality. Rocksource has earned a 5% interest by funding a controlled source electromagnetic (“CSEM”) programme and their promoted contribution to the first well will permit them to increase this to 15%. A further 10% interest will be available should they elect to make a further promoted contribution to a second exploration well. Mariararo-1 Mahajanga Mahajamba-1 Block 2102: Marovoay Madagascar In October 2010, the Group entered into a heads of agreement with FAR, an ASX-listed oil and gas exploration and production company. The heads of agreement enables FAR to acquire a 10% paying interest (8.8% beneficial interest) in the AGC Profond PSC by contributing 15% of the cost of the first exploration well. The heads of agreement gives the Group the right to acquire a 25% interest in FAR’s three licences in Senegal which cover an area of 7,990km 2 and include several deepwater prospects that are considered to be analogous to prospects in the AGC area. In the event that both Rocksource and FAR complete their full earning obligations the Company’s participating interest will reduce to 54.2%. Exploration and appraisal The first exploration period commenced on 19 September 2006. The first renewal period commenced on 19 September 2009 and lasts for two years with a commitment to drill one exploration well to a minimum depth of 1,500m. An extension for a further two years is possible with a further commitment to drill another exploration well, also to a minimum depth of 1,500m. Figure 8 - Marovoay Block 2102 - Madagascar Wilton has undertaken an initial prospectivity assessment of the block that included reprocessing of legacy seismic data, extensive field studies and sample analysis. A revised geological model has been developed which has potentially significant implications for the prospectivity of the basin. The Group has acquired approximately 3,600km 2 of high resolution gravity gradiometry and aeromagnetic data, through a contract with UK potential field specialists ARKeX Ltd in order to test these geological concepts. Under the terms of the farm in agreement entered into with Wilton, the Group will fund 100% of the cost incurred during the first exploration phase (carrying Wilton’s 20% interest) and will also carry Wilton’s share of costs during the second exploration phase and the third exploration phase, subject to certain agreed caps.
Page 1 and 2: An African Energy Company Annual Re
Page 3 and 4: Contents Overview Highlights of the
Page 5 and 6: 3 SADR x4 Daora, Haouza, Mahbes, Mi
Page 7 and 8: negotiations with the Government of
Page 9 and 10: 7 Ophir energy plc | 2010 ANNUAL RE
Page 11 and 12: Jonathan Taylor BSc (Hons), MSc - E
Page 13 and 14: 11 Control room on the rig floor, D
Page 15 and 16: 13 The operational activities under
Page 17: Forward plan The recent drilling re
Page 21 and 22: Block Marine iX, congo (Brazzaville
Page 23 and 24: 21 campaigns offshore Tanzania and
Page 25 and 26: OPERATIONAL RISKS Discovery Risk: N
Page 27 and 28: 25 ORDINARY SHARES OF 0.25P EACH NA
Page 29 and 30: supplier payment policy The Company
Page 31 and 32: Auditors Each of the persons who is
Page 33 and 34: The Board of Directors currently co
Page 35 and 36: health, safety & environment commit
Page 37 and 38: The remuneration of the Executive a
Page 39 and 40: 37 Independent Auditor’s Report W
Page 41 and 42: Group Accounts Group Statement of C
Page 43 and 44: group Accounts Group Statement of F
Page 45 and 46: Group Accounts Group Statement of C
Page 47 and 48: Notes to the financial statements 1
Page 49 and 50: Notes to the Financial Statements 2
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Page 61 and 62: Notes to the Financial Statements (
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Notes to the Financial Statements 2
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Notes to the financial statements 2
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Notes to the Financial Statements S
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Corporate directory DirecTOrs non e
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