No fear for new kid on the African block

PERTH-based junior Pura Vida Energy has pulled off another coup after confirming its acquisition of the Nkembe block in Gabon. Focussed on Africa, the company initially set its sights on offshore Morocco in the Mazagan field, but seismic data confirmed the permit contained a prospective resource of 5.3 billion barrels of oil, prompting US company Plains Exploration to invest $219 million for a major stake.
The share market responded with shares skyrocketing from 20c to more than 90c. As the best performing IPO in 2012, many analysts questioned whether Pura Vida would be able to build on its earlier success. Managing director Damon Neaves said Gabon represented an opportunity for the company to expand and complement its portfolio – something it promised shareholders last year.
“On a technical level, we liked the block a lot,” he said.
“Morocco is more frontier with bigger targets and is now fully funded, whereas Gabon is more mature and has quite a prolific basin. “We’re right in the heart of the basin and the edge of the block is peppered with proven fields and a number of discoveries.”
Those fields include some of the biggest companies in the world: Total Energy has 100,000 barrels of oil pumping out every day from a nearby well.
“A number of big players have made significant investments in Gabon and have been there for decades,” Mr Neaves said. Mr Neaves said operational costs were also lower, with the shallower waters (400m deep compared to 2km in Morocco) and closer proximity to infrastructure.
Gabon is traditionally an oil-producingnation, involved in the oil and gas industry for more than 50 years with established
policies and ports.
“Compared to its West African neighbours, Gabon is very stable politically and the government has a good understanding of the industry,” Mr Neaves said. “Oil accounts for about 60 per cent of government revenue, so oil is really the engine that fires the Gabonese economy.
“The government is very pro the oil industry.” Gabon and Angola are on a conjugate margin to Brazil, meaning the geology is very similar.
With Brazil quickly emerging as one of the world’s major energy players, explorers have returned to West Africa hoping duplicate large discoveries across the Atlantic. “The real attraction is the salt related plays so we’ve got an extension of the pre-salt play that worked very well on the conjugate margin in Brazil, which led to big discoveries in Angola,” Mr Neaves said.
“Just a few weeks back, Harvest announced a big discovery in the pre-salt in Gabon and the sub salt as well.
“Those salt features we see make very good oil traps and we’ve got existing wells on top of these features at a number of locations along the block where we’ve had oil discovered.
“We think that we can image down the salt and target the deeper reservoir along the salt and have a very good chance of finding oil there.”
The next step for Pura Vida will be to establish a farm out deal on the 1210sqkm tenement.
“The strategy will be to replicate what we have done very successfully in Morocco,” Mr Neaves said.
“Like Morocco, we got in on a big equity position. At Gabon we’re in at 80 per cent, with the government holding the rest. “We’ve got 3D coverage across the whole block so we’ll be looking to release some certified resource estimates in the next few months and shooting some seismic later in the year and defining the salt plays.
“It’s a great opportunity; you don’t normally see junior capture acreage in a place like this – in the heart of a mature basin – so were really happy to have a foothold in an area like this.”

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