Corcel Plc, the pan Angola-Brazil focused exploration and production company, announces an update to its exploration and development operations in onshore Angola.
Highlights:
o Initial KON-11 drilling and well testing activities suspended
o Focus turns to geological and geophysical data collection and studies
o Onshore Angola remains a key commercial asset for Corcel - one with multiple parallel avenues of value creation and development
Corcel Executive Chairman Antoine Karam commented: "While initial results in Angola have not allowed immediate reactivation of the Tobias Field as originally hoped, the block partners are undertaking a detailed review of how to best utilize and exploit the two wells recently completed and further develop the full potential of the block. The Company and its block partners believe KON-11 continues to offer significant developmental potential and that these early testing results are by no means a definitive outcome.
Activities are accelerating at the Company's operated block, KON-16, which we believe offers substantial upside and an attractive exploration risk/return profile.
While the Company continues to actively review new projects as part of the normal course of business, Corcel's interests in Angola remain key commercial assets for the Company and we and our block partners believe that further development will add significant value to our respective businesses as our three blocks are advanced.
Meanwhile, the Company intends to host an investor event covering its current plans and strategy in the near term, with further details to be provided."
Angola Operational Update:
The operator of Block KON-11, has reported to the block partners that it has suspended well testing operations on TO-13 following inconclusive results. After several weeks of well testing and engineering efforts the well has produced minimal levels of water and oil to date.
With the initial well tests now completed, KON-11 operations will turn to geology and geoscience efforts targeted to better understand these results and how they might compare to the historic wells drilled and operated on the Tobias field in KON-11. The block partners believe that enhanced understanding of the subsurface conditions including efforts made to better understand the natural fracture system characteristics, any formation damage and residual issues with water inflow should be the current focus.
Overall, the Company believes that the identified potential of the Tobias reactivation effort, and KON-11 more broadly, remains significant, and that these early results will both usefully inform next steps and lead the block partners to ultimate commercial production in the block.
Activities at KON-16 during 2024 are expected to focus on G&G studies, including review of existing seismic data, a review of the historic Tuenza-1 well which had oil shows in the pre-salt level and associated petrophysical analysis. The immediate goal of these efforts is to prepare an updated prospect and lead table for consideration by the block partners.
The Company believes that KON-16 offers sizeable upside in the form of 1,029 MMbo unrisked recoverable leads in the pre-salt, where the Tuenza-1 well (1960) was historically drilled on the block and oil and gas was found bleeding from the core in the Cuvo formation.
Corcel Angola Overview:
The current Corcel Angola portfolio consists of three blocks in the onshore Kwanza Basin:
Block KON-11 and KON-12 are considered brownfield redevelopment opportunities as each block contains historic production from two separate fields, the Tobias and Galinda fields, operated by Petrofina from the early 1960s through to the 1990s, before both were shut-in it due to the encroachment of fighting related to the Angolan civil war. Combined historic production at both of these fields was over 30 MMbbls.
Corcel's current unproduced prospective oil resources are estimated at:
o KON-11 - 65.3MMbbls - 11.7 MMbbls net
o KON-12 - 19MMbbls - 4.28 MMbbls net
KON - 11 (Non-Operated) (20% working interest - 18% net to CRCL)
o Two new wells drilled indicating the presence of movable oil
o 12 historical wells + 2 new wells (Tobias Field)
o Peak production of ~18,000 bopd in 1963
o Reservoir: Oolitic fractured carbonates in the Binga Formation
o API: 35°
KON - 12 (Non-Operated) (25% working interest - 22.5% net to CRCL)
o 8 historical wells (Galinda Field)+ 4 wells in the separate Pitchi structure
o Target reservoirs include the Cuvo Formation standstone and the Binga Formation
o API: 28-30°
KON-16 is considered a high-upside exploration block, with significant pre-salt and post-salt targets and one historic well drilled on the license that encountered oil shows in both the post and pre salt horizons.
KON - 16 (Operated) (35% working interest - 31.5% net to CRCL)
o 1 historical well with oil shows in the Cuvo formation
o Sizeable pre and post salt targets across the block,
o Post-salt 456 MMbbls - unrisked P50 (138 MMbo risked), 81.1 MMbls net
o Pre-salt 1,029 MMbbls - unrisked P50 (223 MMbo risked), 215.9 MMbls
Corcel is the operator of Block KON-16 and a non-operator in Block KON-11 and KON-12.
Politically, reactivation of the Kwanza Basin, remains a key governmental goal in Angola, and interest in the most recent block bid rounds has led to unprecedented interest in the region. Activities across the blocks are expected to significantly increase in the coming years, which will ultimately attract more service providers and lower costs of services, equipment and new wells in due course.
Qualified Persons Statement:
Jennifer Ayers, a Geologist with over 25 years of relevant experience in the oil industry and member of the American Association of Petroleum Geologists and Geological Society of America, has reviewed this announcement for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009.