Agri Energy (ASX: AAE) has received a boost today with a review of historical data of its Sudan onshore oil and gas block suggesting they could hold significant hydrocarbons.
The historical data, which previous Block 14 operators had spent more than $15 million acquiring, was obtained without cost from Sudan’s Ministry of Petroleum.
This includes ground and airborne gravity surveys, aero-magnetics, 2D seismic data, Microbiological Prospecting for Oil and Gas (MPOG) studies as well as field and laboratory studies.
“Geological activity has now begun in earnest in Block 14. The compilation and re-interpretation of the historical data will form the basis for our plans going forward,” managing director Gregory Channon said.
“We will save significant time and money by accessing and utilising this data. Additionally, the results of the 2008 MPOG Report and the shows from the well to the south are the first real indications that hydrocarbons could be present in Block 14, enhancing the prospectivity considerably.”
The MPOG studies, where detection of large populations of hydrocarbon degrading micro-organisms in shallow soil samples indicates a corresponding hydrocarbon signature deeper underground, examined borehole soil samples at 1,089 locations in Block 14.
These found high indication values at several stations that prove the principle occurrence and potential activity of hydrocarbon oxidising bacteria.
Importantly, the highest readings occur immediately above the largest lead identified within the block.
“The results of this study are very encouraging and are the best indication yet that hydrocarbon accumulations exist in the block,” Channon added.
The identification of these anomalies is the first real indication that an effective petroleum system could be present in Block 14 and reduces Block 14’s critical risk of the presence and maturity of source rocks.
Further de-risking Block 14 is the exploration well in the Block 12A, immediately south of Block 14, that encountered hydrocarbon shows.
This is the first exploration well to be drilled in the Mourdi Sub-basin and the Block 12A joint venture is believed to be planning to drill a second well while the rig remains in the region.
The Mourdi Sub-basin extends from Block 12A directly into the south western portion of Block 14 and shows an affinity with the Kufra, Murzuq and Ghadames Basins in Libya. The Murzuq Basin to the north west contains 2 billion barrels of proved reserves, whilst the Ghadames holds 3 billion barrels of proved reserves.
Immediately to the north, Petroceltic International (LON:PCI) and its partners in the El Mesaha Block in Egypt are planning to drill an exploration well before the end of this year.
Block 14 is situated in the remote and un-inhabited north western corner of Sudan, directly adjacent the border with Egypt and Libya.
Agri is acquiring a 49.9% stake in African focussed explorer Statesman Africa that holds a 75% working interest in a massive 100,000 square kilometre onshore Sudan block.
It will pay a nominal consideration for the stake in Statesman Africa (SAL), a wholly-owned subsidiary of Statesman Resources Limited (CVE: SRR) and fund 49.9% of share of costs of SAL’s activities including but not limited to the work program for Block 14.
The minimum expenditure over the three year term of the Exploration Production Sharing Agreement for Block 14 is US$12 million.
Agri has advanced Statesman US$800,000 as interim funding and to form part of its overall funding obligations upon completion of the transaction.
The previous operator, Sudapet, identified a multi-billion barrel resource inventory in Block 14 while preliminary work undertaken by Statesman indicates the largest lead could have a mean potential resource of 600 million barrels.
Other partners in Block 14 include private Nigerian company Express Petroleum with 15% and Sudanese national oil company Sudapet with 10%.
Agri is changing its name to Sirocco Energy.
Proactive Investors is a market leader in the investment news space, providing ASX “Small and Mid-cap” company news, research reports, StockTube videos and One2One Investor Forums.