Pancontinental Energy says a process is already underway to secure an alternate farm-in partner to fund exploration and drilling within PEL 87 at the earliest opportunity after Woodside Energy elected not to farm-in.
PEL 87, in offshore Orange Basin, covers an area of 10,970 km2 and is on-trend with several significant hydrocarbon discoveries made in recent times by Galp Energia, TotalEnergies, and Shell.
Woodside Energy had until May 18, 2025, to decide whether it would take up 56% interest in PEL 87 or not after executing an option deed in March 2023 to fund a 3D seismic survey over PEL 87, which cost US$35 million.
However, the Australian company opted out, and now the joint venture of Pancontinental (75%), Namcor (10%), and Custos Energy (15%) says they have received third-party interest.
If Woodside Energy had exercised the option, the parties would have entered into a farmout agreement to fully fund the joint venture by drilling the first exploration well to be drilled within PEL 87.
Woodside Energy would also have paid Pancontinental approximately US$2.5 million, of which approximately US$1.5 million is for reimbursement of a portion of past costs.
PEL 87 is the only permit not held by a major oil and gas company adjacent and on-trend to the giant Mopane discovery.
Pancontinental says given the company’s low quarterly cash burn, it remains well funded to progress the farmout process by December 31, 2024, with a cash balance of US$3.6 million.
“Noting today’s separate announcement regarding Pancontinental’s estimate of prospective resources for PEL 87, the Board and management remain confident of the significant hydrocarbon prospectivity as identified by the high-quality 6,593 km2 3D seismic dataset that was fully funded by Woodside,” Pancontinental says.
Pancontinental CEO Iain Smith says the company sees excellent potential for significant hydrocarbon finds within the Saturn Complex.
Smith says this is largely due to Saturn’s proximity to the world-class Kudu oil kitchen and the presence of AVO signatures, which we understand are consistent with significant discoveries on-trend to the south at the Mopane Complex and Venus/Mangetti.
‘With the benefit of the valuable 3D seismic data set and the essential technical work we have undertaken, we look forward to our continued discussions with third parties as we secure an alternate farm-in partner for PEL 87,” Smith says.
PEL 87 is within the first renewal exploration period that commenced on January 23, 2024, and will end on January 22, 2026.
This period includes an associated work commitment to drill one exploration well or, if a drillable prospect is not identified, acquire either 500 km2 of 3D seismic data or 1,000 line km of 2D seismic data.
