Oil and Gas Exploration Company, focused on offshore West Africa African Petroleum (APCL) announced on Tuesday what it termed as “a transformational” oil discovery at the Narina-1exploration well in Block LB-09 offshore Liberia.
APCL said the well was drilled to a total depth (TD) of “4,850 metres and encountered 32 metres (net) of high quality, light oil pay in two separate intervals: 21 metres in a good quality Turonian submarine fan system and 11 metres in a deeper Albian sand with secondary potential”.
The National Oil Company of Liberia (NOCAL) in a press release on Tuesday said it “welcomes” the announcement by African Petroleum that their Narina-1 exploratory well drilled in Block LB-09 off the coast of Liberia “indicated a potentially large accumulation of oil deposits”, while emphasising that development of any discovery “will take several years”.
NOCAL said the exploration and preliminary discovery by African Petroleum “provides further evidence of Liberia’s strong offshore prospects, part of the same geological system that has yielded significant discoveries in neighbouring Sierra Leone and Ivory Coast”.
APCL disclosed in a media statement made available to Awoko Business on Tuesday that it “has made a significant oil discovery, encountering a total of 32m of net oil pay in two zones (Turonian – 21 m and Albian -11m)”.
The Oil explorer said: “Good quality oil was found in each zone and hydrocarbon shows were encountered over a 170m interval in the Turonian with no oil water contact found”.
What it described as “good quality” reservoirs were discovered in the Turonian submarine fan system which expands across a prospective area of 250 sq km.
Although early indications from the APLC release are positive, the exact extent of the deposits found in LB-09 is not yet known. African Petroleum will now conduct tests to further evaluate the quantity of the oil discovered, a process expected to take several months allafrica.com reported on Tuesday.
This evaluation it said “will indicate whether the deposits are in sufficient quantity to be commercially viable for production. Once appraised, the deposits will then take five to seven years until production can begin”.
The President and CEO of NOCAL, Dr Randolph McClain, reportedly said on Tuesday that “This news is good news for Liberia, and we are cautiously optimistic. We do not yet really know how much is down there. But we know, according to African Petroleum, that this discovery is of very good to excellent quality oil. We will be working with African Petroleum to develop a better picture. So now, we urge everyone to be very patient. It will take time to fully appraise this discovery, and years before a drop of oil is produced from the well.”
The Liberian discovery prompted entrepreneurial and independent investment dealer focused on serving corporate clients and institutional investors GMP Securities to re-adjust APCL target price on Tuesday saying “We are raising our target price to A$5.40 (from A$2.10) following the Narina discovery and re-iterate our BUY recommendation. We now carry the estimated 500 mmb Narina discovery as an undeveloped asset, which significantly increases our core NAV to A$2.77/sh from our previous estimate of A$0.01/sh and constitutes a large portion of our target price.
London based stockbroker Maribaud Securities said the NXS listed company stock is expected to generate absolute positive price performance of over 20% during the next 12 months.
It however said “in light of this success, we reiterate our BUY recommendation with an upgraded target price of A$2.70/shr”
ADVERTISEMENT