Armour commissioned its explorationists to identify company making oil discovery opportunities, following the termination of the American Energy Partners agreement on the north Australian basin project in 2015. As a result of the top down global review, Armour identified that over 30% of the world's oil production and reserves is in Rift Basins.
These basins (which include most familiarly to Australians, the Gippsland Basin) formed during the earth's continental breakup at the end of the Cretaceous period approximately 65 million years ago.
These basins are characterised by:
- Very high substance rates
- High organic carbon contents
- Fast burial
- Intercalated coarse sand wedges
- High heat flows
- Rapid oil prone petroleum generation, migration and entrapment
- Effective seals
These characteristics result in large oil prone, low risk drill prospects. Examples of this style of targets exist in offshore situations including the Gippsland Basin, Guyana-Suriname Basin and the Safaniya Oil Field.
Armour identified the Albertine Graben in Uganda, on the East Africa Rift system as a proven onshore and offshore opportunity for oil discovery, hosting existing production licences by Total, Tullow and CNOOC with over 6.5 Billion Barrels of oil in place.
Uganda's Albertine Graben presents a low risk destination for world class onshore oil discoveries.
- 115 exploration and appraisal wells drilled to date
- 101 wells encountered hydrocarbons
- Drilling success rate of over 85%
- 36 exploration wells and 79 appraisal wells
- 28 wells have been flow tested
- Crude blend between 230 -330 API with very low sulphur
Albertine Graben and 1st Licensing Round
Armour concluded negotiations with the Government of Uganda in September 2017 which enabled an exploration licence for the Kanywataba block to be granted to Armour following the signing of the Production Sharing Agreement with the Government of Uganda. Armour was the first company to have been granted an exploration licence out of the first licencing round tender issued by the Government of Uganda in late 2015. The grant of the licence is a significant milestone for Armour and provides exposure to a world renowned oil province.
Commercial Arrangements with DGR Global Ltd
As announced in late 2017, Armour Energy has agreed, subject to Government of Uganda consent, to transfer the tenement to a project specific company in which Armour will have a 16.82% interest and DGR Global, a major shareholder in Armour, shall hold the other 83.18% interest in the transferee entity. Until the time of transfer to a project specific company, or if such transfer does not occur, Armour and DGR Global have agreed that the beneficial interest in the Kanywataba Block will be split 16.82% Armour and 83.18% DGR Global.
In consideration for the beneficial interest split DGR Global has agreed to meet tenement expenditure and work program commitments for the first 2 year period of exploration and indemnify Armour for these costs.
Kanywantaba Block (344 square kilometres)
The original license over this area expired in mid-2012 and the area reverted to the Government of Uganda (GoU). The block was included in the 1st Licencing Round issued by GoU. Armour considers the prospectivity of the Kanywantaba block to be very good and our review includes:
- To date only one well drilled on the block (CNOOC/Tullow) and Armour considers that venture:
- Did not drill deep enough to properly test the target
- Missed multiple seismic anomalies attributable to hydrocarbons to the west
- Multiple developed but untested on-trend structural traps remain (3-way and 4-way dip closures)
- Multiple untested stratigraphic traps remain
- Two targeted plays; Miocene and Pliocene stacked oil and gas prospects
- The discovery of oil at Kingfisher and presence of oil seeps confirm working petroleum system in block
- Block structures and stratigraphic-traps in proximity to hydrocarbon generation kitchen (hosts source rock) Type II
Oil Seeps Kanywataba Block - No Risk on Hydrocarbon Generation
High frequency filtered seismic (noise removal)
Prospect 3 'Flat-Spots' Best Estimate - 74 MMBBLS
- Close proximity to kitchen source
- 3-way dip closure structure trap
- Multiple levels of seal shales
- Stacked multi-level sand reservoirs
- Seismic section showing direct Hydrocarbon-Indicators (2D Flat-spots)
A flat spot (red dashed line) is a reflective boundary between types of fluids in a charged reservoir being either gas-oil, gas-water or oil-water.
Note the roll of the structure above and below the flat spot is preserved and present at multiple levels; depth is approximately 1500m @ red dashed line flat spot.