résumé:
Dominion est présent en Tanzanie, Uganda et RDC.
Dominion est à cours de cash mais a des projets:
- Tanzanie onshore:
1/ Farm in avec MAU: étude edn cours pour planifier un second puit
2/ Farm in avec Heritage: 2 puits prévus. début opérations fin 2009 - Financement 100% Héritage
- Tanzanie offshore:
sismique en cours
- Uganda Albertine Rift Basin à prixmité du block détenu esn RDC sur un terrain déjà exploré avec succès par Tullow et Heritage
15 leads dont 4 sont en état de commencer les forages en parlant de possibilité d'atteindre jusqu'à 1Mbl
Le cout d'explo initial avec 2 puits est estimé à 17m$ et n'a pas de financement. Dominion cherche activement un farm in.
-RDC: adjacent à Uganda ne possède que 50%, Dominion est opérateur sismic en cours et doit etre achevé fin 2009
- Des ambitions de développement: Dominion est en négociation finale pour acquérir des droits sur 3 nouveaux champs à fort potentiel. A court de cash, Dominion cherche un financement
Dominion recherche activement un moyen de financement et est en discussion avec de nombreux investisseurs
Pour mémoire: Dominion Market cap 40m$ et besoins mini en explo: 85m$
Source:
http://www.proactiveinvestors.co.uk/companies/news/5533/dominion-petroleum-high-impact-exploration-in-sub-saharan-africa-5533.html
In today’s capital-starved financial climate, are low-cost low-risk prospects the way to go?
AIM-listed, Sub-Saharan Africa focussed Dominion Petroleum (DPL) doesn’t think so. With its ambition to become the leading independent upstream exploration company in the region, playing it safe simply won’t do. Dominion is instead targeting higher risk, but potentially high reward, opportunities.
We take a look at Dominion’s substantial exploration portfolio, its strategy of forming partnerships with sizeable and experienced oil companies, and its operational plans for 2009-2011.
AIM HIGH – WITH 41,420 square kilometres of net acreage
Dominion Petroleum is currently focussed exclusively on three countries around Lake Victoria, being Uganda to the north, Tanzania to the south, and the Democratic Republic of Congo (‘DRC’) to the west. Investor and industry interest in this area has surged recently, thanks to some major discoveries by other operators - and Dominion is seeking to join them.
Acquiring large tracts of territory is one thing; exploring them is another. And if drilling is successful, at what point do operations become cash generative? Dominion’s strategy is to focus its activities on the earliest stages of the exploration and production sequence - and then invite partners on board, who can bring their financial and human resources to bear on the identified opportunities. Dominion is, at root, an explorer. We will now look in outline at the company’s acreage in Uganda, Tanzania and the DRC, and at the potential they appear to offer.
UGANDA
Dominion identified the potential of Uganda relatively early, and was successful in acquiring the Block 4B Production Sharing Contract in July 2007. This acreage is in a previously unexplored part of the Albertine Rift Basin, which runs through Uganda and the DRC. This Basin is the largest oil reserve in East and Central Africa, with major finds by Tullow Oil and Heritage Oil making headlines in the industry.
Initial investigation of this block by Dominion was done using airborne gravity and magnetic surveys. These indicated the presence of thick sedimentary formations capable of generating oil. This work has been followed by completing 371km of onshore 2D seismic, with a further 130km completed over part of Lake Edward. And the presence of oil has been confirmed through the discovery of oil seeps on the surface of Lake Edward, an area of which forms part of the block, and also at outcrop on land. Geochemical analysis indicates that the basin contains mature source rocks that have generated petroleum.
So far, the company has identified some 15 leads and prospects in Block 4B, which covers an area of 2,021 square kilometres. Of these, 4 have already reached drillable status, with combined P50 unrisked recoverable resources estimated at 355 million barrels of oil. About half of this is in the ‘C’ prospect, at a sizeable 172 million barrels. The other 11 leads require further seismic study; they are currently considered by the company to offer a combined unrisked 782 million barrels of oil.
Dominion is therefore suggesting that there might be anything up to about one billion barrels of recoverable oil in this block. Such upside must naturally be treated with caution; the drill bit has a habit of delivering cruel disappointments, and despite advances in seismic techniques and drilling methods the average success rate in Africa is still only about 20%. But the presence of the oil seeps proves the presence of oil somewhere in the vicinity - and the success rate in Uganda by other operators is currently a remarkably high 100%.
Dominion Petroleum has already completed more seismic than was required under the first phase of the contract, and is required to drill at least one exploration well in the second phase, which expires in July 2011. The company’s current plans are to drill two wells in late 2009-2010. Targeted prospects are relatively close to surface, and can be reached from onshore locations using a land rig.
Dominion currently has 100% of the Block 4B PSC. Dominion is currently assessing how best to finance the drilling of the two exploration wells, which currently have an estimated combined cost of $17.6m. Options include issuing new shares to institutional investors or else industry partners via a strategic investment or else farm-out of the licence. Given the considerable interest in the area, the Company is confident it will be successful in raising the funds required.
TANZANIA
Dominion Petroleum has a dominant position in the oil and gas frontier territory of Tanzania.
With leads and prospects onshore as well as offshore in the Indian Ocean, and few wells drilled to date, Tanzania is attracting major oil companies including Shell, Petrobras, Tullow, Heritage and Maurel et Prom.
The gross area of Dominion’s three onshore and one offshore Production Sharing Agreement blocks is 48,230 square kilometres; about one-third of this has been farmed out, as noted below. Extensive 2D seismic - some 4,350 km offshore and almost 1,000 km onshore - has already been obtained over this very substantial acreage, with a further 500 sq. km. of 3D seismic to follow on the offshore block.
The apparent potential of this acreage, based on seismic interpretation, is very substantial. Tanzania is already producing gas onshore; the unrisked resource estimate for the Dominion onshore acreage is currently put at some 750 million barrels of oil equivalent. Offshore, five plays have been identified by Dominion, containing 11 leads and prospects already mapped – and one of these is estimated at about a billion barrels unrisked. But the water is deep, between half a mile and one and a half miles, way beyond the range of jack-up rigs. This is heavyweight exploration; not the world’s most difficult waters, but certainly very expensive to drill. There is also the issue of production infrastructure; in essence, Dominion is investing in seismic work with the objective that this will prove sufficiently persuasive to get one or more large oil companies to commit to funding most or all of the initial drilling. But even a moderate slice of multi-billion barrel potential could give Dominion a very good return on its outlay and efforts, and oil majors are sure to cast an eye over such large opportunities.
The onshore acreage is much less expensive to drill, and Dominion has already secured farm-out deals with both Heritage and Maurel et Prom. These companies are both significant players in the region and are valuable partners. The first well Mandawa-1, drilled in the Mandawa PSA with Maurel et Prom, was announced in March as a dry hole. The target formation was found to be poorly developed and contained water; however, oil shows were encountered in the well in the deeper claystones, which had been predicted to be a hydrocarbon source rock in the area. Such results require thorough examination by experts, and before the second exploration well is drilled the partners will be studying the data closely.
Dominion is partnered in the Kisangire PSA by Heritage – which has taken a 55% equity stake as well as operatorship. Two wells are planned; the first of which has an estimated cost of $12.5m is fully carried by Heritage and is due to be drilled in late 2009. The second well has a partial carry by Heritage – but if the first well is a success, funding its share of the second well should not be too hard for Dominion to arrange.
DEMOCRATIC REPUBLIC OF CONGO (DRC)
Dominion Petroleum as operator, in partnership with SOCO International (38.25%) and the state oil company COHYDRO (15%) has signed a Production Sharing Agreement with the Government of the Democratic Republic of Congo for Block 5. This very large block of 7,346 sq. km. is immediately west of, and adjoins Dominion’s Block 4B in Uganda. Like the Ugandan block, it also contains part of Lake Edward. The award of this PSA is subject to Presidential ratification, which is still awaited.
An initial airborne gravity and magnetic survey conducted in August 2008 indicates the presence of a large mid-basin high within Block 5. Until seismic data, currently scheduled for late 2009 has been collected, processed and interpreted it is impossible to quantify the potential. That said, noting the evidence of oil seeps in Lake Edward and just across the border, as mentioned above, this acreage would seem an attractive opportunity. With partners already on board, Dominion seems well-placed with this opportunity - but the delay in Presidential ratification introduces some degree of uncertainty.
NEW VENTURES
Dominion has recently advised that it has some “new ventures (which are) at an advanced stage of negotiation (which would) bring further large upside” (11 April 2009). Whilst the company’s current presentation gives no details of where or what these might be, outline plans for three new ‘assets’ have been given: Dominion say that an airborne gravity and magnetic survey is pencilled-in for 2009, with seismic and drilling work potentially taking place during the following two years. Investors will be watching eagerly for more news.
FINANCIALS
The prospect of finding large oilfields in this part of Africa is a mouth-watering one for oil companies hungry for major new reservoirs, and for investors seeking high upside potential.
Whilst we note that resource estimates based on seismic rather than drilling can be proved woefully wrong by the drill bit, Dominion recently indicated that, if its Albertine Rift acreage proves to be as prospective as that held to the north by Tullow and Heritage, it could conceivably be worth in the order of almost US$ 2 billion based on analysts valuations for their neighbours. With a market capitalisation of £40 million Dominion’s upside is clearly very substantial - but as yet, the company is yet to make a discovery and consequently the market remains cautious.
Dominion does not currently have enough partner funding and cash to cover its 2009-2011 exploration programme in full, the cost of which is currently estimated at $85m including some contingency. Moreover, it is seeking new ventures which would presumably involve some further financial demands. Some might well interpret this negatively, as implying a potential shortfall in funding. But others would argue that, provided the speed of the exploration programme can be regulated, it is far better to have a surfeit of opportunities to choose from. The company’s current position on these matters is clear: “Dominion is currently in discussions with a number of parties with regard to funding its forward plans. Whilst successful completion of these discussions cannot be assured, the company remains confident that financing will be secured in a timely fashion to enable its exploration program to continue accordingly” (6 March 2009)
With evidence of consolidation within the sector, and concerns about the longer-term supply of oil, Dominion’s acreage cannot be ignored. The ability of the company to attract and retain good farm-in partners, whose geologists will have pored over the company’s seismic data, is perhaps the best litmus test of its potential until more drilling has been done and more quantitative analysis is possible.
Lake Edward, which is an important landmark in Dominion Petroleum’s operations, was discovered by the famous explorer Henry Morgan Stanley in 1875. Stanley found water; Dominion, its partners and investors are hoping to uncover something very much more valuable. Dominion said last month that the seismic confirms the company’s view that “the prospectivity of the Lake Edward basin is comparable to that of Lake Albert” - which is where Heritage and Tullow are having major success. The next couple of years promise excitement, and not a little risk; but frontier exploration was always like that.
Dominion est présent en Tanzanie, Uganda et RDC.
Dominion est à cours de cash mais a des projets:
- Tanzanie onshore:
1/ Farm in avec MAU: étude edn cours pour planifier un second puit
2/ Farm in avec Heritage: 2 puits prévus. début opérations fin 2009 - Financement 100% Héritage
- Tanzanie offshore:
sismique en cours
- Uganda Albertine Rift Basin à prixmité du block détenu esn RDC sur un terrain déjà exploré avec succès par Tullow et Heritage
15 leads dont 4 sont en état de commencer les forages en parlant de possibilité d'atteindre jusqu'à 1Mbl
Le cout d'explo initial avec 2 puits est estimé à 17m$ et n'a pas de financement. Dominion cherche activement un farm in.
-RDC: adjacent à Uganda ne possède que 50%, Dominion est opérateur sismic en cours et doit etre achevé fin 2009
- Des ambitions de développement: Dominion est en négociation finale pour acquérir des droits sur 3 nouveaux champs à fort potentiel. A court de cash, Dominion cherche un financement
Dominion recherche activement un moyen de financement et est en discussion avec de nombreux investisseurs
Pour mémoire: Dominion Market cap 40m$ et besoins mini en explo: 85m$
Source:
http://www.proactiveinvestors.co.uk/companies/news/5533/dominion-petroleum-high-impact-exploration-in-sub-saharan-africa-5533.html
In today’s capital-starved financial climate, are low-cost low-risk prospects the way to go?
AIM-listed, Sub-Saharan Africa focussed Dominion Petroleum (DPL) doesn’t think so. With its ambition to become the leading independent upstream exploration company in the region, playing it safe simply won’t do. Dominion is instead targeting higher risk, but potentially high reward, opportunities.
We take a look at Dominion’s substantial exploration portfolio, its strategy of forming partnerships with sizeable and experienced oil companies, and its operational plans for 2009-2011.
AIM HIGH – WITH 41,420 square kilometres of net acreage
Dominion Petroleum is currently focussed exclusively on three countries around Lake Victoria, being Uganda to the north, Tanzania to the south, and the Democratic Republic of Congo (‘DRC’) to the west. Investor and industry interest in this area has surged recently, thanks to some major discoveries by other operators - and Dominion is seeking to join them.
Acquiring large tracts of territory is one thing; exploring them is another. And if drilling is successful, at what point do operations become cash generative? Dominion’s strategy is to focus its activities on the earliest stages of the exploration and production sequence - and then invite partners on board, who can bring their financial and human resources to bear on the identified opportunities. Dominion is, at root, an explorer. We will now look in outline at the company’s acreage in Uganda, Tanzania and the DRC, and at the potential they appear to offer.
UGANDA
Dominion identified the potential of Uganda relatively early, and was successful in acquiring the Block 4B Production Sharing Contract in July 2007. This acreage is in a previously unexplored part of the Albertine Rift Basin, which runs through Uganda and the DRC. This Basin is the largest oil reserve in East and Central Africa, with major finds by Tullow Oil and Heritage Oil making headlines in the industry.
Initial investigation of this block by Dominion was done using airborne gravity and magnetic surveys. These indicated the presence of thick sedimentary formations capable of generating oil. This work has been followed by completing 371km of onshore 2D seismic, with a further 130km completed over part of Lake Edward. And the presence of oil has been confirmed through the discovery of oil seeps on the surface of Lake Edward, an area of which forms part of the block, and also at outcrop on land. Geochemical analysis indicates that the basin contains mature source rocks that have generated petroleum.
So far, the company has identified some 15 leads and prospects in Block 4B, which covers an area of 2,021 square kilometres. Of these, 4 have already reached drillable status, with combined P50 unrisked recoverable resources estimated at 355 million barrels of oil. About half of this is in the ‘C’ prospect, at a sizeable 172 million barrels. The other 11 leads require further seismic study; they are currently considered by the company to offer a combined unrisked 782 million barrels of oil.
Dominion is therefore suggesting that there might be anything up to about one billion barrels of recoverable oil in this block. Such upside must naturally be treated with caution; the drill bit has a habit of delivering cruel disappointments, and despite advances in seismic techniques and drilling methods the average success rate in Africa is still only about 20%. But the presence of the oil seeps proves the presence of oil somewhere in the vicinity - and the success rate in Uganda by other operators is currently a remarkably high 100%.
Dominion Petroleum has already completed more seismic than was required under the first phase of the contract, and is required to drill at least one exploration well in the second phase, which expires in July 2011. The company’s current plans are to drill two wells in late 2009-2010. Targeted prospects are relatively close to surface, and can be reached from onshore locations using a land rig.
Dominion currently has 100% of the Block 4B PSC. Dominion is currently assessing how best to finance the drilling of the two exploration wells, which currently have an estimated combined cost of $17.6m. Options include issuing new shares to institutional investors or else industry partners via a strategic investment or else farm-out of the licence. Given the considerable interest in the area, the Company is confident it will be successful in raising the funds required.
TANZANIA
Dominion Petroleum has a dominant position in the oil and gas frontier territory of Tanzania.
With leads and prospects onshore as well as offshore in the Indian Ocean, and few wells drilled to date, Tanzania is attracting major oil companies including Shell, Petrobras, Tullow, Heritage and Maurel et Prom.
The gross area of Dominion’s three onshore and one offshore Production Sharing Agreement blocks is 48,230 square kilometres; about one-third of this has been farmed out, as noted below. Extensive 2D seismic - some 4,350 km offshore and almost 1,000 km onshore - has already been obtained over this very substantial acreage, with a further 500 sq. km. of 3D seismic to follow on the offshore block.
The apparent potential of this acreage, based on seismic interpretation, is very substantial. Tanzania is already producing gas onshore; the unrisked resource estimate for the Dominion onshore acreage is currently put at some 750 million barrels of oil equivalent. Offshore, five plays have been identified by Dominion, containing 11 leads and prospects already mapped – and one of these is estimated at about a billion barrels unrisked. But the water is deep, between half a mile and one and a half miles, way beyond the range of jack-up rigs. This is heavyweight exploration; not the world’s most difficult waters, but certainly very expensive to drill. There is also the issue of production infrastructure; in essence, Dominion is investing in seismic work with the objective that this will prove sufficiently persuasive to get one or more large oil companies to commit to funding most or all of the initial drilling. But even a moderate slice of multi-billion barrel potential could give Dominion a very good return on its outlay and efforts, and oil majors are sure to cast an eye over such large opportunities.
The onshore acreage is much less expensive to drill, and Dominion has already secured farm-out deals with both Heritage and Maurel et Prom. These companies are both significant players in the region and are valuable partners. The first well Mandawa-1, drilled in the Mandawa PSA with Maurel et Prom, was announced in March as a dry hole. The target formation was found to be poorly developed and contained water; however, oil shows were encountered in the well in the deeper claystones, which had been predicted to be a hydrocarbon source rock in the area. Such results require thorough examination by experts, and before the second exploration well is drilled the partners will be studying the data closely.
Dominion is partnered in the Kisangire PSA by Heritage – which has taken a 55% equity stake as well as operatorship. Two wells are planned; the first of which has an estimated cost of $12.5m is fully carried by Heritage and is due to be drilled in late 2009. The second well has a partial carry by Heritage – but if the first well is a success, funding its share of the second well should not be too hard for Dominion to arrange.
DEMOCRATIC REPUBLIC OF CONGO (DRC)
Dominion Petroleum as operator, in partnership with SOCO International (38.25%) and the state oil company COHYDRO (15%) has signed a Production Sharing Agreement with the Government of the Democratic Republic of Congo for Block 5. This very large block of 7,346 sq. km. is immediately west of, and adjoins Dominion’s Block 4B in Uganda. Like the Ugandan block, it also contains part of Lake Edward. The award of this PSA is subject to Presidential ratification, which is still awaited.
An initial airborne gravity and magnetic survey conducted in August 2008 indicates the presence of a large mid-basin high within Block 5. Until seismic data, currently scheduled for late 2009 has been collected, processed and interpreted it is impossible to quantify the potential. That said, noting the evidence of oil seeps in Lake Edward and just across the border, as mentioned above, this acreage would seem an attractive opportunity. With partners already on board, Dominion seems well-placed with this opportunity - but the delay in Presidential ratification introduces some degree of uncertainty.
NEW VENTURES
Dominion has recently advised that it has some “new ventures (which are) at an advanced stage of negotiation (which would) bring further large upside” (11 April 2009). Whilst the company’s current presentation gives no details of where or what these might be, outline plans for three new ‘assets’ have been given: Dominion say that an airborne gravity and magnetic survey is pencilled-in for 2009, with seismic and drilling work potentially taking place during the following two years. Investors will be watching eagerly for more news.
FINANCIALS
The prospect of finding large oilfields in this part of Africa is a mouth-watering one for oil companies hungry for major new reservoirs, and for investors seeking high upside potential.
Whilst we note that resource estimates based on seismic rather than drilling can be proved woefully wrong by the drill bit, Dominion recently indicated that, if its Albertine Rift acreage proves to be as prospective as that held to the north by Tullow and Heritage, it could conceivably be worth in the order of almost US$ 2 billion based on analysts valuations for their neighbours. With a market capitalisation of £40 million Dominion’s upside is clearly very substantial - but as yet, the company is yet to make a discovery and consequently the market remains cautious.
Dominion does not currently have enough partner funding and cash to cover its 2009-2011 exploration programme in full, the cost of which is currently estimated at $85m including some contingency. Moreover, it is seeking new ventures which would presumably involve some further financial demands. Some might well interpret this negatively, as implying a potential shortfall in funding. But others would argue that, provided the speed of the exploration programme can be regulated, it is far better to have a surfeit of opportunities to choose from. The company’s current position on these matters is clear: “Dominion is currently in discussions with a number of parties with regard to funding its forward plans. Whilst successful completion of these discussions cannot be assured, the company remains confident that financing will be secured in a timely fashion to enable its exploration program to continue accordingly” (6 March 2009)
With evidence of consolidation within the sector, and concerns about the longer-term supply of oil, Dominion’s acreage cannot be ignored. The ability of the company to attract and retain good farm-in partners, whose geologists will have pored over the company’s seismic data, is perhaps the best litmus test of its potential until more drilling has been done and more quantitative analysis is possible.
Lake Edward, which is an important landmark in Dominion Petroleum’s operations, was discovered by the famous explorer Henry Morgan Stanley in 1875. Stanley found water; Dominion, its partners and investors are hoping to uncover something very much more valuable. Dominion said last month that the seismic confirms the company’s view that “the prospectivity of the Lake Edward basin is comparable to that of Lake Albert” - which is where Heritage and Tullow are having major success. The next couple of years promise excitement, and not a little risk; but frontier exploration was always like that.
