Aminex (LON:AEX) and Solo Oil (LON:SOLO) have successfully confirmed the discovery of a gas reservoir in the Ntorya-1 well.
The well was deepened earlier this month after it initially missed it primary pre-drill target. However it did encounter gas deeper in the well.
Today, Aminex revealed that Ntorya-1 well found a sand interval with 25 metres gross pay, with a 3 metre net gas bearing pay zone.
“Given current plans to develop major gas infrastructure on the coast just 25 kilometres away, this has the potential for commercial development and opens new possibilities in the underexplored onshore regions of our Ruvuma block PSA," said chief executive Stuard Detmer.
The discovery of reservoired hydrocarbons in Cretaceous sands in Ntorya-1 opens up the potential for additional plays in thick Mesozoic sands encountered by Aminex and partners in the Likonde-1, Aminex explained.
Likonde-1 was drilled 14 kilometres away from the Ntorya-1 site back in 2010. It encountered oil and gas but the discoveries were deemed uncommercial.
The partners now plan to deepen Ntorya-1 further still, extending the well by 250 metres down to a depth of 3,000 metres. Aminex says that drilling deeper offers the possibility of finding liquid hydrocarbons.
This extra drilling is testing a prominent seismic event, Aminex added.
Solo Oil's executive director Neil Ritson added: "With the recent high profile offshore exploration successes in the Ruvuma Basin we are delighted to have been able to extend the proven gas fairway onshore in Tanzania.
"There is immense potential to pursue additional opportunities within the Ruvuma PSA and the probable construction of gas infrastructure at the coast, just 25 kilometres away, makes commercial development very likely."
Aminex is the operator of the project and it has a 56.25 per cent in the asset, while Solo Oil owns an 18.75 per cent interest.
Tullow Oil is also a partner with a 25 per cent stake. However it decided not to participate in the well deepening exercise.
As a result, Aminex has a 75 per cent stake in the deeper section and Solo has the remaining 25 per cent.
Ntorya 1 was drilled in an onshore location in eastern Tanzania. It was drilled to test an area within the Ruvuma basin, which is also host to several large gas discoveries offshore in deep waters.
The Ruvuma Basin has become extremely active for the oil and gas industry in recent years. And it came sharply into focus for investors last week as a bidding war emerged for AIM-quoted Cove Energy (LON:COV).
Anglo-Dutch major Shell made the first move bidding just shy of £1 billion to buy Cove. But on Friday this offer was trumped by a £1.2 billion bid by a division of Thailand’s national oil company, called PTT Explortation.
Cove has an 8.5 per cent stake in an Anadarko Petroleum led venture that has drilled several successful deep water gas wells offshore in the Mozambique sector of the basin.
BG (LON:BG.) and partner Ophir Energy (LON:OPHR) also made an offshore gas discovery in the Tanzanian sector last year.