Tullow 2013 half-yearly results. Following is a direct copy and paste of the Kenya and Ethiopia section of the Tullow 2013 half yearly results.
Kenya
In Kenya Tullow operates six onshore blocks in the East African Rift system with a 50 to 65% equity interest covering
around 80,000 sq km. Tullow also has a 15% interest in Block L8, offshore Kenya.
The onshore acreage covers multiple rift basins which have similar characteristics to the Lake Albert Rift Basin in Uganda.
90 leads and prospects have so far been identified across this acreage following the acquisition of 55,000 sqkm of FTG and
4,160 km of 2D seismic. Exploration drilling and testing activity in the region commenced in January 2012 with the drilling
of the Ngamia-1 well followed by the Twiga South-1 well. These initial discoveries have now been flow tested indicating
over 250 mmbo mean resources discovered. Following the completion of the Etuko-1 well, the Kenya Pmean resources are
expected to be well in excess of 300 mmbo, exceeding the basin threshold for development. Exploration and appraisal
activities to date in 2013 have significantly de-risked remaining prospectivity in the basin and underpin our belief that it
has similar potential to the Lake Albert Rift Basin in Uganda.
The flow tests of the Twiga South-1 and Ngamia-1 discovery wells were completed in February and July 2013 respectively.
Both wells flowed at a cumulative constrained rate of around 3,000 bopd of 25 to 35 degree API sweet waxy oil with no
indication of pressure depletion. These tests resulted in the doubling of our previous estimates of net oil pay, proved the
potential to achieve an unconstrained rate of over 5,000 bopd per well and significantly increased discovered volumes to
over 250 mmbo. Ekales-1, the next exploration well in the Basin Bounding Fault Play, on trend with Ngamia and Twiga-
South, commenced drilling on 22 July 2013. A 550 sq km 3D survey over the area, which will support our appraisal
programme, is also scheduled to commence in the third quarter of 2013.
In May 2013, drilling commenced on the Etuko prospect, 14 km east of Twiga South-1 in Block 10BB. This is the first test of
the Basin Flank Play in the eastern part of the basin and results of drilling, wireline logs and samples of reservoir fluid
confirm a new oil discovery with net pay of over 40 metres in the Auwerwer and Upper Lokhone targets. The well was
then deepened into the Lower Lokhone sands and encountered an additional 50 metres of potential net oil pay which will
be included in a programme of flow testing later this year, to determine their production potential. Although the Lower
Lokhone sands have been established to be poorer quality than the main objectives in the Auwerwer and Upper Lokhone,
we have successfully flowed oil from this interval at Ngamia. Once operations at Etuko-1 are complete, the rig will move to
the Agete prospect north of Twiga-South.
In addition to the existing two rigs, a third rig has been contracted to support increased exploration and appraisal activity
in Kenya by the end of the third quarter of 2013. A dedicated well testing unit has been contracted and will arrive in
country in the fourth quarter of 2013.
The excellent results to date onshore Kenya are an important step towards understanding the overall basin potential and
its commerciality. Resources discovered to date are of a scale that the partnership will initiate discussions with the
Government of Kenya and other relevant stakeholders to consider development options. These discussions include
consideration of a ”start-up phase” oil production system with potential to deliver significant production rates with oil
export via road or rail in advance of a full-scale pipeline development. To facilitate these development activities in parallel
with exploration and appraisal, an “Area of Interest” (AOI), encompassing the basin discoveries and further prospects in
Blocks 13T and 10BB, was agreed with the Government of Kenya in February 2013. This agreement allows a multiple field
approach to development of the resources while permitting the continued focus on exploration to increase the resource
base while concurrently appraising discoveries.
Elsewhere in Kenya, in a different play in the Anza Basin in Block 10A, the Paipai-1 commitment well was drilled in March
2013 and encountered light hydrocarbon shows whilst drilling. The well has been suspended and will be tested in the
future.
Ethiopia
In Ethiopia, Tullow has a 50% operated interest in the South Omo block, its most northerly interest in the Kenya-Ethiopia
Rift system where at least two independent basins have been identified. In January 2013, Tullow commenced drilling
Sabisa-1, the first ever well in this frontier acreage in the South Omo Basin. The well encountered reservoir quality sands,
oil and heavy gas shows and a thick shale section. The presence of oil prone source rocks, reservoir sands and good seals is
extremely encouraging for the numerous fault bounded traps identified in the basin. Discovering an oil prone basin is an
important result for the remaining prospectivity and consequently a follow-up prospect in the basin will now be drilled
targeting some of the 30 or so leads and prospects identified to date. The Tultule prospect, four kilometres east of
Sabisa-1, is expected to commence drilling late in the third quarter of 2013. Numerous additional follow-up prospects have
been mapped in this part of the South Omo Block and in the adjacent Chew Bahir Basin which will be targeted after the
Tultule-1 well.
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