FirstAfrica Oil’s growing pains

May 1, 2006
FirstAfica Oil Plc’s fasttrack development offshore Gabon in the East Orovinyare field is in progress and first oil production is expected by the end of this year.

Fasttrack development of Gabon’s EOV field


Pam Boschee, International Editor

FirstAfica Oil Plc’s fasttrack development offshore Gabon in the East Orovinyare field is in progress and first oil production is expected by the end of this year.

The company is a pan-African upstream oil and gas company with onshore and offshore assets in Gabon, West Africa. It was formed after Financial Development Corp. merged several oil and gas exploration subsidiaries; Energem Resources Inc. is now its parent company. FirstAfrica was listed on the London Stock Exchange about a year ago.

Besides the offshore Gabon field, the company also has onshore operations in Gabon (Epaemeno) and Chad (Chari Ouest & Largeau).

Its nine-month history shows steady progress toward development of the field, but sustaining the fast pace depends on securing necessary capital.

The company is considering its future funding needs in order to meet its $68 million work program in 2006, and may seek alternative funding such as equity fundraising, project/debt finance, and farm-ins or partnerships with other exploration companies.

Promising prospects

The EOV field discovery area was proven up by Marathon Oil Co. in 1999 with two discovery wells. Marathon relinquished the field due to the $10-$12/bbl oil prices at that time.

Gulf of Guinea Petroleum Corp. Gabon (EOV) Ltd., now a wholly subsidiary of FirstAfrica, acquired the block which has proved plus probable reserves of 13.2 MMbbl of oil. GGPC’s development plan was approved by the government of the Gabonese Republic in December 2005.

The fasttrack development plan called for the first appraisal/development well to be drilled from early January 2006.

FirstAfrica spudded its first well in January when the Global Santa Fe jackupGSF Adriatic IX began drilling EOV-4. The planned mid-December 2005 spud of EOV-4 was delayed by three weeks due to extended operation of the drilling rig on its previous contract.

The well was successful in proving up the eastern flank of the EOV field in February when an oil column of 165 ft (128 ft forecast) was encountered. Drillstem testing of the Batanga reservoir recovered oil of API 37.5°. Mechanical difficulties prevented oil flows from being achieved. However, these difficulties were reported as specific to this well and are not expected to recur in subsequent drilling.

EOV-4 has been temporarily suspended with theGSF Adriatic IX moving to another contract. GGPC will continue with a 100-day drilling program with the GSF Adriatic VI. Three additional development wells are to be drilled and completed.

The development plan calls for production from four wells to a single, unmanned platform tied back to an FPSO. Production of the light crude from the four wells will be processed on the FPSO and is expected to begin 4Q 2006.

Two pre-existing appraisal wells, previously suspended Marathon wells, are to be re-completed as producers.

GGPC is the permit holder (100%) and operator of the EOV field, which is located 13 km offshore in 20 m of water. The EOV permit area covers 105 sq km of acreage.

In addition to the discovered oil, the broader East Orovinyare permit area holds potential for production from several exploration prospects for which substantial 3D seismic has been attained and analyzed. The EOV concession prospects have an unrisked estimated 421 MMbbl of oil in place, according to Exploration Consultants Ltd. FirstAfrica is considering farm-in offers for further exploration activities.

EOV permit

  • PSC signed between GGPC and Gabon government for EOV permit area in February 2004 ($500,000 signing bonus)
  • Field development plan approved by government December 2005
  • Field located 6 miles offshore in 65 ft of water covering 105 sq km
  • EOV discovery (proven up by Marathon in 1999)
  • Recent evaluation of subsurface by ECL supports economic resource of (2P) 34 MMbbls and (3P) 47 MMbbl
  • EOV development area (10 km radius of EOV discovery) has unrisked estimated 421 MMbbl

Long-term vision

FirstAfrica’s executive chairman Brian Menell acknowledges the challenge of firming up funding for development and production. Currently, he characterizes the company as “under-appreciated in the market.”

‘We’d like to pursue our present portfolio of assets and create out of them a sustainable and substantial purely African-focused upstream oil and gas exploration, oil field development, and production company and use that as a platform to become a major player in the arena.”

He sees FirstAfrica as unique in that it has proven resources in the midst of a fasttrack development program with a short time frame to production, “which takes us apart from a number of our peers who are more pure exploration vehicles.”

“Complemented with our short-term production and proven reserves, we have a very large-scale exploration upside, which is focused on a number of key parts of the African upstream oil and gas arena with a very desirable balanced exposure to those high-potential plays across some interesting countries in Africa.”

Menell says the company “has the background and the position on the ground and some unique abilities to handle those environments.”