DGR Global joins Armour in Uganda

DGR Global Ltd., Brisbane, has made an agreement with fellow explorer Armour Energy Ltd., also of Brisbane, to take part in Armour’s application for the Kanywataba block at the southern end of Lake Albert in Uganda.

DGR Global Ltd., Brisbane, has made an agreement with fellow explorer Armour Energy Ltd., also of Brisbane, to take part in Armour’s application for the Kanywataba block at the southern end of Lake Albert in Uganda.

The block is to be initially granted to Armour and, subject to Ugandan government consent, then will be subsequently placed into a specific project company. Under the agreement, Armour will retain 16.82% while DGR will meet the tenement expenditure and work program commitments for the first 2 years and indemnify Armour for these costs.

Until the transfer is complete Armour will hold DGR’s 83.18% in trust.

Armour has concluded negotiations with the Ugandan authorities and expects the Kanywataba exploration license to be granted this month.

The 2-year licence is renewable for a further 2 years. The first 2 years’ work commitment includes geological and geophysical work, reviews and reprocessing of existing data and the acquisition of a 100-km 2D seismic survey. The second 2 years involves further geological and geophysical work and the drilling of one well.

DGR Global has agreed to spend as much as $837,000 for a performance guarantee; $442,000 to complete the grant of the licence; and $1.98 million for the first 2 years of the exploration program.

The block is in the prospective Albertine graben where more than 100 wells have been drilled, most of which have encountered hydrocarbons. Discoveries to date total about 6.5 billion bbl of oil in situ of which an estimated 1.5 billion bbl are recoverable. The oil is 30-35° gravity. Discoveries of wet and dry gas also have been made according to the Ugandan Ministry of Energy and Mineral Development.

Production licenses have been awarded to Total SA, Tullow Oil PLC, and CNOOC Ltd. on blocks to the north of the Kanywataba block on the east coast of Lake Albert.

A crude oil export pipeline is under construction from the Hoima District oil discovery region to the port of Tanga in Tanzania. Completion of the line is scheduled for 2020.

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