Wednesday 13 June 2018

Pancontinental Oil & Gas NL announced that the PEL 37 Joint Venture is on schedule for the upcoming drilling of the highly anticipated Cormorant-1 well, offshore Namibia.

Operator Tullow Namibia Limited, a wholly owned subsidiary of Tullow Oil plc, is well underway with preparations for the commencement of drilling of the Cormorant-1 well as projected in September, 2018. The well will be drilled by the drillship Ocean Rig Poseidon in a water depth of 545m and is expected to take 34 days to reach Total Depth. Ocean Rig Poseidon has already been mobilised to Namibia to drill Cormorant-1.

Almost 70% of critical well service contracts have been let with a number of local Namibian companies successfully securing contracts during the tendering process being managed by Tullow.

Pancontinental farmed out to Tullow in 2013 and will now be fully carried through the cost of drilling the well. The Company’s 20% interest is held in a 66.7% owned subsidiary Pancontinental Namibia Pty Ltd that has a 30% interest in PEL 37, where Africa Energy Corp holds the other 33.3% interest.

Pancontinental will also boost its cash reserves by AU $7.3 million (equivalent to US $5.5 million) with the second stage payment due from Africa Energy Corp. (TSXV:AFE) at the spud of Cormorant-1 expected in September.

In addition to the entry into the project of Africa Energy in September last year, Indian oil and gas Company ONGC Videsh Limited also farmed in. Earlier this year oil major ExxonMobil announced its farmin to PEL 82 (adjacent to Pancontinental’s PEL 37) for a 40% interest.

At drilling, the PEL 37 joint venture will consist of:

Tullow Namibia Limited (Operator) 35.00%

Pancontinental Namibia Pty Ltd 30.00%*

ONGC Videsh Limited 30.00%

Paragon Oil & Gas (Pty) Ltd 5.00%

*Ownership of Pancontinental Namibia Pty Ltd:

Pancontinental Oil & Gas NL 66.67%

Africa Energy Corp. 33.33%