Woodside secures option for offshore Namibia farm-in

Woodside Energy Ltd. signed an option deed with Pancontinental Energy NL (Pancon) to farm into the Pancon-operated deep water permit PEL87 offshore Namibia.

Under the agreement, Woodside will fully fund a $35 million 3D seismic survey over a minimum area of 5,000 sq km as well as pay Pancon $1.5 million in cash.

In exchange, Woodside has an exclusive option to farm into the permit for 56% interest and take over operatorship. Pancon currently holds 75% interest.

Woodside would have at least 180 days after delivery of the seismic survey data to exercise the option. If exercised, Woodside would pay Pancon an additional $2.5 million, of which about $1.5 million is for reimbursement of part of Pancon’s past costs. Woodside would then drill an initial exploration well carrying Pancon at 20% interest.

To ensure it retains at least 20% interest in the project if Woodside exercises its option, Pancon entered its own $1.5 million option agreement with another JV partner, Custos Investments Pty Ltd., to acquire 1% of Custos’ current 15% interest by paying Custos another $1.5 million.

If the JV partners decide to drill a second well, Pancon will have the right to either fund its 20% interest or elect to have Woodside carry it for 10% by transferring another 10% interest in the permit to Woodside.

Pancon also has a back-up right to convert all its interest to a 1.5% overriding royalty interest on revenue from any eventual oil or gas sales.

PEL87 covers an area of just under 11,000 sq km in the Orange basin and contains the large Saturn turbidite complex which has been mapped by Pancon as being on-trend with recent oil discoveries.

Nearby wildcats by TotalEnergies (Venus-1), Shell (Graff-1, La Rona-1) in 2022, and Shell again in 2023 (Jonker-1), have proven a working light oil system offshore Namibia, Pancon said. Both TotalEnergies and Shell have plans for discovery appraisal work.

Saturn has been mapped with a core area of 2,400 sq km and an overall area of 4,000 sq km. The 3D survey over the prospect, expected to begin shortly, is designed to define drilling targets.

The Namibian Minister of Mines and Energy recently granted the PEL87 JV a second 1-year extension of its initial exploration period.

PEL87 was first awarded to the Pancon JV in January 2018.

Pre-farm-in interests in PEL87 are Pancontinental (75%), Custos Investments (15%), and National Petroleum Corp. of Namibia (10%).

Potential farminee, Woodside, is currently operating the Sangomar oil discovery development offshore Senegal, further north along the West African coast.