For months investors have been watching the wells progress with eager eyes and several times rumours of a result have seen dramatic spikes in the company’s share value.
However Bounty says the drilling operations have been completed, oil shows established and the well suspended while further study is carried out on the feasibility of a full testing program.
Both the target Lower Cretaceous (Neocomian) and Upper Jurassic formations revealed consistent shows of gas and oil. However, the results from the testing program, which used an MDT tool (Modular Formation Dynamics Tester) to provide down-hole well test information, have to date been inconclusive and subject to recurring mechanical failures of the tool.
The MDT program was designed to take pressure data and fluid samples to a depth of 3886m, but no fluid samples have been obtained below a depth of 3406m. Given the uncertainty of being able to undertake satisfactory repairs to the tool in the near future, the testing program was terminated (with a substantial portion remaining incomplete), the tool stood down and the well suspended with a wellhead in place.
“While we are clearly disappointed that we were unable to obtain definitive results at Nyuni-1, we believe that the well has confirmed the prospectivity of the region and has substantially upgraded the potential of the permit,” said Bounty managing director Tom Fontaine.
Bounty said that coupled with geochemical and other analyses of regional surface oil seeps, which precisely match oil shows analysed from Nyuni-1A, the well provides the first indication to date of a new oil province in East Africa, previously considered to be a purely gas-prone area.
Prior to any further drilling, the Joint Venture will conduct a detailed review of the licence area, integrating the information from the Nyuni-1/1A well. It is likely that existing seismic will be reprocessed in light of the well results and possible that further seismic acquisition carried out.
A decision will be made on a full well test of the suspended Nyuni-1, and on the next drilling location, as soon as this review has been concluded.
“Despite the well taking longer than anticipated to drill, Bounty will not be exposed to any additional expenditure, as our agreement with Aminex provides a cap to Bounty’s drilling costs for the Nyuni and Okuza wells. At such time as the costs meet or exceed an agreed level, Bounty will be provided with an opportunity to either continue to fund its 10% share or to proportionately dilute its interest to a minimum of 5%,” said Fontaine.
After a bumpy period at the start of the year Bounty’s stock price has been on a gradual slide since late March, falling from its peak of 21 cents to 10 cents at the time of print.
Partners in the Nyuni Block are Bounty Oil & Gas NL 10% (earning), Ndovu Resources 60% (Operator) and Petrom SA 30%.
