Heritage Oil Corporation has signed the previously announced farm-in documentation on two onshore exploration licences in the Republic of Mali ("Mali"), following the Government of Mali's approval of the transaction. The two licences have a gross area of over 72,000 square kilometres and Heritage has been appointed as the Operator.
Under the terms of the transaction, Heritage has a right to earn a 75% working interest in Block 7 and Block 11 from Mali Oil Development SARL, a wholly owned subsidiary of the public company Centric Energy Corp. In return for earning the working interests, Heritage will fund all costs of the required work programs for the next two years on both blocks, comprising the acquisition of 2D seismic and the drilling of one exploration well, at a total estimated cost for the two licences of between US$15 million and US$20 million. The acquisition of 2D seismic is expected to take place
later this year.
Blocks 7 and 11 are located in the Gao Graben, a Mesozoic basin that management considers to have geological similarities to other Mesozoic interior-rift basins within North Africa, such as the Muglad Basin of Sudan and the Doba Basin of Chad, and Tertiary basins such as the Albert Basin of Uganda. Previous seismic data acquired on Blocks 7 and 11 show the presence of tilted fault-block traps, and indicate a thickness of up to approximately 4 km of sediments.
Kingfisher-2 well, Block 3A, Uganda
Heritage confirms that it expects to spud the high-impact Kingfisher-2 appraisal/exploration well in the second quarter of 2008. The operator of the neighbouring Block 2 licence, Tullow Oil, has announced that it is releasing the Nabors 221 drilling rig and preparations have begun to prepare to mobilise the rig to the Kingfisher-2 site. The Kingfisher-2 well will appraise the reservoir zones discovered by the Kingfisher-1 well, which was completed in 2007 and tested approximately 13,900 bopd. These productive zones were secondary objectives, since the primary, deeper target was not reached for reasons related to rig performance. The Kingfisher-2 well will be drilled using the more capable Nabors 221 rig, and in addition to appraising the previous discoveries will explore the original, deeper primary objective.