Tullow, Heritage press exploration in Uganda

Feb. 11, 2008
Heritage Oil Corp., Calgary, and Tullow Oil PLC are attempting to tap Uganda’s first oil discoveries in what could become Africa’s next oil production megaproject.

Heritage Oil Corp., Calgary, and Tullow Oil PLC are attempting to tap Uganda’s first oil discoveries in what could become Africa’s next oil production megaproject.

Seismic and drilling are ramping up in the Lake Albert rift basin with expectations of reaching commercial status and identifying sufficient reserves to support construction of a pipeline some 1,300 km to the Indian Ocean.

The currently drilling exploration well is expected to reach its primary target in late March 2008, and the outlook for the first oil production is in 2009.

Tullow, operator of Block 2 with 100% interest, plans to invest more than $200 million—double its 2007 outlay—in 2008 in Uganda.

Both Tullow and Heritage hold interests in blocks on both sides of the lake in Uganda and remote eastern Congo (former Zaire). Oil discoveries so far include Kingfisher, Nzizi, Mputa, Waraga, and Turaco, and eight wells have been successful (OGJ, June 10, 2002, p. 42).

Exploratory drilling

Tullow, with 100% interest in 3,900 sq km Block 2, expects to reach the primary target in March 2008 at the Ngassa exploratory well, spud in November 2007.

The well, which was at 1,400 m in late January, has a primary objective expected at 3,000-4,900 m and several intermediate reservoir targets.

Wellsite construction problems, technical difficulties drilling through faulted claystones, and supply disruptions related to the unrest in Kenya have delayed the well, which originally was to take 110 days to reach the primary target.

Meanwhile, Tullow plans to start an eight-well exploratory program near Butiaba late in the 2008 first quarter. Land 2D seismic has been shot on Blocks 1 and 2.

The Block 2 program was 80% complete in late January. The company had already identified numerous prospects, some with amplitude effects characteristic of hydrocarbons.

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“These early results indicate considerably greater prospectivity in the Butiaba region than in the adjacent Kaiso-Tonya area,” Tullow said. The first well will most likely be on the Taitai prospect, formerly Waki-2, near Waki-1 drilled in 1937.

Tullow completed Mputa/Nzizi appraisal drilling in December 2007 when the Mputa-4 well proved the lateral extent of oil-bearing reservoirs across the region. Pressure data from the extended well test indicated some depletion over the test period.

Tullow is integrating appraisal well and 3D seismic data with an updated geological model to refine reserve estimates and development planning assumptions ahead of the anticipated sanction of the early production system in the 2008 second quarter.

Other areas

Heritage and Tullow are interpreting 3D seismic shot over the Kingfisher discovery on Block 3A. Heritage operates 3A, and interests are held 50-50.

The data will be used to plan the Kingfisher-2 appraisal well, to spud after the Ngassa well completion.

Heritage’s Kingfisher discovery well, deviated from shore to TD 3,195 m beneath the lake, yielded an overall cumulative maximum flow rate of 13,893 b/d of oil on a 1-in. choke.

A shallower 10-m interval at 1,783 m produced 4,120 b/d in November 2006, and three other intervals of a combined 44 m thick at 2,260-2,367 m totaled 9,773 b/d in February 2007.

Kingfisher oil is 30-32° gravity sweet crude with a low gas-oil ratio and some associated wax. The sandstone reservoir permeability is as high as 2,300 md.

The rig drilling Ngassa is of a larger capacity needed to explore the deepest objectives not penetrated by the Kingfisher discovery well.

Interpretation of the Pelican prospect, in Lake Albert off Kaiso town, looks “particularly encouraging with some good seismic amplitude anomalies potentially indicative of hydrocarbons,” Tullow said.

Further technical work is needed before a drilling decision on a number of other lake prospects.

Meanwhile, Tullow and Heritage were awaiting Congolese presidential sanction of Blocks 1 and 2, on which they signed a production sharing agreement in July 2006. The blocks total 6,500 sq km on and offshore in the southern part of the lake. Interests are Tullow operator with 48.5%, Heritage 39.5%, and Cohydro 12%.