Falcon Oil & Gas Ltd., Dublin, has agreed to work exclusively with a South African affiliate of Chevron Corp. to seek unconventional exploration opportunities in the Karoo basin in South Africa.
Falcon has a technical cooperation permit (TCP) that gives the independent exclusive rights to obtain an exploration permit on 7.5 million acres in the southern part of the basin (OGJ Online, Sept. 17, 2012).
The new agreement provides for Falcon to work exclusively with Chevron Business Development South Africa Ltd. for 5 years in jointly obtaining exploration permits, subject to the parties mutually agreeing participation terms applicable to each permit. Falcon is to disclose when a permit is awarded. Chevron will advance Falcon $1 million now for past costs.
Falcon noted that the Karoo basin covers 236,000 sq miles or nearly two-thirds of the country, with the 70,800-sq mile southern part of the basin potentially favorable for shale gas. A large part of Falcon’s 11,719-sq mile TCP is in the prospective area, along the southern boundary.
The Permian Ecca Group has three potential gas shales in the Ecca formation. The most promising of these is the highly organic-rich, thermally mature shale of the Whitehall formation. This unit is regionally persistent in composition and thickness and can be traced across most of the basin.
Advanced Resources International Inc., Arlington, Va., estimated the undiscovered petroleum-initially-in-place and the prospective undiscovered resource attributable to these shales on behalf of the US Energy Information Administration. That April 2011 report concluded that the Lower Ecca Group shales contain 1,834 tcf of risked gas in-place with a risked recoverable shale gas prospective resource of 485 tcf.