ERHC Energy Inc (ERHE)

[TOB]

All of Ophir's Gas Discoveries in Block R adjacent to JDZ-2 are likely uncommercial as stand-alone wells. It is when they are tied together into a field development and a pipeline is built to an LNG plant that they become commercial. The Block R discoveries are all dry gas just like ERHC's JDZ discoveries so far. A good sized gas reservoir would certainly make another pearl in Ophir's necklace.

JDZ-2 may not be commercial stand-alone for gas, although it was surely evaluated and Sinopec did not stick around considering it for nothing. They wouldn't have even asked for multiple extensions if there was nothing to evaluate. The same is true about potential small oil discoveries like JDZ-1 Obo-1, likely uncommercial standalone, but potentially commercial as a field development.

JDZ-2 Bomu-1 has not seen an appraisal well but reports put it right in the upper range of Ophir's nearby gas discoveries in Block R. With a planned pipeline to an LNG plant nearby, the Bomo-1 discovery and the large target Principe could become well worth additional drilling for appraisal.

Sinopec was not looking for dry gas, but Ophir most definitely is and they have advanced plans to bring it to market.

Note also that Ophir didn't only drill thrust related structural closures like Bomu-1, they have refined their exploration to explore specifically for dry gas and to also target stratigraphic fan plays and multiple shallow reservoirs. Apparently quite common in the JDZ as dry gas was encountered in multiple wells.

Lykos-1 "well targeted a shallow gas anomaly demonstrating the feasibility of low cost "riserless" well design to explore and develop such features."

(scroll down for additional charts and analyses)




Fortuna-1 targeted stratigraphically trapped closures. Both very different from the Bomu-1 well where ERHC's operator was prospecting for oil and drilled a structural target. ERHC's Bomu-1 well nevertheless made a gas discovery and proved a working petroleum system in JDZ-2. It also established that the rather unusual geological conditions necessary for shallow dry gas is quite prevalent in the JDZ, just as it is in the nearby Block R.






These are very different from the structural targets Sinopec and Addax drilled. Sinopec, Addax, ERHC and Total are also exploring for oil. What Sinopec, Addax and ERHC discovered so far is dry gas, which may not be interesting to them stand-alone or at all, but is exactly what Ophir is prospecting for within subsea tie-in distance.

The Tonel-1 gas discovery exceeded estimates and makes a pipeline to Bioko and a second LNG Train a go and makes almost certain a commercial gas field development. Bomu-1 demonstrates that the gas field extends right into JDZ-2 and is likely to have similar stratigraphic fan and shallow plays to add to the structural discovery.

I find it fascinating that this potential can be discounted as non-commercial in the absence of an appraisal well or the reservoir estimates of Bomu-1 and ERHC's other dry gas discoveries. Is it disappointing to learn that there is a large and successful effort to explore for dry gas and develop a gas field within tie-in distance of ERHC's JDZ-2 dry gas discoveries with a planned pipeline to an LNG facility? That is curious and interesting.

(JDZ-2 Bomu-1 structural target below)