First is the upcoming conference in Namibia that I posted about earlier and the is this,
If successful the Kabeljou exploration well could potentially establish Namibia as the latest hotspot for offshore oil exploration.
The exploration venture, operated by Brazil’s Petrobras is targeting the giant 4.9 billion barrel Nimrod prospect.
Petrobras owns a 30 per cent stake in the well while super-major and AIM quoted Chariot Oil & Gas () own 45 and 25 per cent respectively.
Drilling on the 3,350 metre well began last month and the first results are expected in mid-September at the earliest.
Analysts say an oil find will be a catalyst for the African exploration frontier.
“The size of Kabeljou means that a successful result would have industry implications,” analyst Stuart Joyner said in a note.
The analyst recons the prospect has the potential to ‘move the dial’ for Petrobras and , which for companies of that size is a rarity for any single exploration programme. And for AIM quoted Chariot this equates to truly massive potential.
Indeed, Joyner estimates about 800 per cent upside for Chariot in the event of a success.
This sort of outcome would be particularly welcome for Chariot investors as its 100 per cent owned, Tapir South exploration well was unsuccessful in May. The disappointing result more than halved Chariots share price at the time.
In recent weeks speculative buying has helped lift the shares as the Kabeljou venture came into focus.
“A high impact discovery would catalyse the Namibian offshore play following the recent disappointment at Tapir South, resulting in a ramp-up of activity and corporate consolidation as new entrants emerge.”
Also likely to benefit from a positive Kabeljou result are fellow Namibia focussed explorers () and ().
The two AIM quoted junior both have prospective exploration acreage off the coast of the west African country. And both have been looking for venture partners to team up with for their own drill programmes.
And as points out today a positive outcome at Kalejou could whip up interest among larger cash-rich industry players.
In July, Spanish major farmed into the Namibia Offshore Licence 0010, while AIM quoted Tower increased its stake in the project also. The acreage position hosts the Delta prospect and five other leads. It is estimated that the block could potentially contain 9.3 billion barrels of oil, or in a gas case 14.5 trillion cubic feet.
now own 44 per cent of the venture, Tower owns 30 per cent and privately owned Arcadia Expro has the remaining 26 per cent.
The Spanish major then began considering rig option for a proposed drill programme.
With an earlier stage project is another explorer that could benefit from increased interest in Namibia. It is looking to farm-down a portion of its 85 per cent stake in Offshore Licence 29.
Seismic exploration work has already identified two ‘mega-structures’ that are thought to be capable of containing multi-billion barrel oil reservoirs.
In a recent note Northland Capital analyst Andrew McGeary points out that the market currently values Global at a modest premium to its cash, and as such he says there is little value being ascribed to the highly prospective assets.
The analyst has a ‘buy’ rating on the stock with a 18.1p price target (current price: 10p). McGeary says he is looking for the share price to move closer towards the value of peer group transactions.