Block 7 is in the eastern sector of the prolific onshore Shabwah Basin. Oil production from the Shabwah Basin is currently about 120,000 bopd, primarily from Blocks 18 and 20.
Block 74 is in the Masila Basin, which is currently producing about 250,000 bopd mainly from Block 14. The new block is roughly 25 kilometres south of Block 43 where Oil Search’s Nabrajah oil field was discovered in 2004.
“Past exploration activity on the newly awarded blocks has been modest and primarily targeted shallower levels,” Voyager managing director John Begg said this morning.
“Prospects and leads have already been identified based on existing seismic data, both for conventional play types but also for fractured basement plays which have been the basis for significant new oil discoveries in Yemen in recent years.”
The Block 7 minimum work program for the committed three-year exploration period requires the partners to reprocess 1,000 kilometres of existing seismic, acquire 250 kilometres of new 2D seismic and drill four exploration wells.
The Block 74 minimum work program for the committed three year exploration period requires Oil Search and its partners to reprocess 500 kilometres of existing seismic, acquire 250 kilometres of new 2D seismic and drill three exploration wells.
Exploration work in Blocks 7 and 74 is expected to begin late this year, following the finalisation of the respective Production Sharing Agreements and ratification by the Yemeni Government.
Oil Search is now building a substantial exploration portfolio in onshore Yemen and Voyager is moving in the same direction. The two companies are also partners in Block 35 and Voyager said it was aiming to acquire interest in a fourth Yemeni project later this year.
Oil Search is also involved in the Nabrajah field and is awaiting final ratification of a production sharing agreement over Block 3, awarded to Oil Search and partner Petoil (Petoil Petroleum & Petroleum Products International Exploration & Production Inc) through direct negotiations with the Yemeni Government.
The committed exploration period for Block 3 is 30 months during which time Oil Search and its partners are required to acquire 300 kilometres of 2D seismic and drill one exploration well.
The other ASX-listed partner, Adelphi Energy, is Arc Energy’s “little brother”.
Adelphi was set up to give Arc – its major shareholder – exposure to a high-risk, high-reward portfolio without compromising Arc's ability to derive value from its existing portfolio of core Perth Basin assets.
Arc and Voyager are moving to merge. Most of Voyager's assets fit with Arc's Perth Basin-based strategy, and neatly extend Arc's interests into the offshore Perth Basin as Cliff Head moves towards production.
But the Yemen interests don't fit at all with this business plan. Last month Begg told EnergyReview that Voyager’s could be taken on by Adelphi Energy following the merger.
"There's certainly a discussion to be had between Arc and the affiliated Adelphi about those assets - but there have been no discussions so far," he said at the time.
Oil Search will operate both blocks taken up by the consortium that includes Voyager and Adelphi. It will also operate the block it is leasing in partnership with Petoil. Working interests in each block are as follows:
Block 7 and 74 working interests are Oil Search (Yemen) Limited (operator) 34%, Kufpec (Aden) Limited 21.25%, Voyager Energy Limited 21.25%, Adelphi Energy Limited 8.5% and The Yemen Company 15%, carried.
Block 3 working interests are Oil Search (Yemen) Limited (operator) 60%, Petoil 35% and The Yemen Company 5%, carried.
