Canadian Petroleum buys into oil-prone block offshore Nigeria

Canadian Overseas Petroleum Limited (COPL) has acquired 80% of the share capital of Essar Exploration and Production (Nigeria).

Essar Nigeria’s sole asset is a 100% operated interest in OPL 226, 50 km (31 mi) offshore in the central area of the Niger Delta.

Assuming approval from Nigeria’s government, COPL subsidiary ShoreCan will take over management of Essar Nigeria.

Recently, Essar gained an extension to the first phase of the PSC to Dec. 31, 2017. The remaining commitment on this phase is to drill one well. COPL has identified a drilling location, which will be an offset to an oil discovery made in 2001 by a previous concession holder.

OPL 226 spans 1,530 sq km (591 sq mi) in water depths of 40-180 m (131-590 ft), with near-term oil production potential and exploration upside.

Five wells have been drilled, of which the last proved oil after earlier drilling intersected largely gas-bearing sands.

The block is located along a large fault-controlled structural complex. To date, 1,750 km (1,087 mi) of 2D seismic and around 1,300 sq km (502 sq mi) of 3D seismic have been acquired. In addition, ShoreCan has completed additional seismic processing to the most recent 3D survey acquired by Essar in 2012.

ShoreCan applied advanced seismic processing techniques to differentiate oil-bearing sands from gas and water-bearing sands.

OPL 226 has an area of 1530 km² and is located approximately 50 km offshore the central delta region of Nigeria in water depths ranging from 40 to 180 meters. It offers oil appraisal and development opportunities having near-term oil production potential and significant exploration upside. Historically, five wells have been drilled, with the first oil discovery on the Block made in 2001in the fifth well after earlier drilling intersected predominantly gas-bearing sands.

The Block is situated along a large growth fault-controlled structural complex, which the company refers to as the Noa Complex. Extensive seismic campaigns have been conducted on the block over the years with 1750 km of 2D seismic, and approximately 1300 km² of 3D seismic data acquired to date. ShoreCan in the last year has completed additional seismic processing to the most recent 568 km² 3D seismic survey acquired by Essar Nigeria in 2012. The advanced seismic processing techniques applied to this data set by ShoreCan were done to differentiate oil-bearing sands from gas and water bearing sands. These techniques were unavailable previously due to the poor quality and inappropriate parameters of the earlier seismic data sets, the company said.

At the request of COPL, Netherland, Sewell & Associates, Inc. (NSAI) has prepared an independent report in accordance with Canadian National Instrument 51-101 evaluating the Contingent and Prospective Resources attributed to OPL 226, as at March 1, 2016. In the report, the Gross Unrisked Contingent Oil Resources recoverable for the primary Noa West oil discovery are estimated to be the following: Low Estimate (1C), 11.5 million Bbls; Best Estimate (2C), 16.1 million Bbls; and High Estimate (3C), 20.7 million Bbls. The Gross Unrisked Prospective Oil Resources recoverable for 15 additional undrilled areas on the Noa Complex in the report are estimated to be the following: Low Estimate, 259 million Bbls; Best Estimate, 461 million Bbls; and High Estimate, 808 million Bbls. In addition to the oil resources identified, NSAI’s report has estimated significant volumes of Unrisked Prospective gas resources on the Block totaling on a Best Estimate basis over 1.7 TCF.