Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Morocco still waiting for offshore oil success

Tangiers Petroleum's TAO well result is the latest in a series of disappointments for investors in Morocco’s would-be offshore oil boom
Morocco still waiting for offshore oil success

Small cap investors in Morocco’s would-be offshore oil boom are still awaiting exploration success as Tangiers Petroleum’s (LON:TPET, ASX:TPT) GALP operated well drew a blank.

Having revealed initial disappointment early last week, with no hydrocarbons in a secondary target, the company has now confirmed that Trident (the well’s primary target) wasn’t successful either.

The well was drilled to a total depth of 3,518m MD and did not encounter favourable reservoir quality in the Trident prospect, Tangiers said.

TAO-1 well will now be plugged and abandoned and the data used to assess the prospectivity of the Tarfaya Offshore Blocks I - VIII.

Dave Wall, Tangiers’ managing director, said: "The company is disappointed that success was not achieved at TAO-1 and we wish to thank our shareholders for their support over the recent challenging period.

“Tangiers board and management remains firmly focused on creating value for shareholders and look forward to providing updates on New Ventures initiatives in the not too distant future."

Tangiers had a 25% stake in TAO-1, where Galp Energia with a 50% stake was the operator. The remaining 25% is held by ONHYM (Morocco's National Office of Hydrocarbons and Mines).

It marks the fourth unsuccessful drill programme in Moroccan waters in the ongoing, sector-wide campaign, though, as an exploration frontier of fairly expansive size it may yet be early days for the North African country.

Nevertheless, as Tangier’s near 70% decline on Monday reflects, investor sentiment is at a particularly low ebb – and many in the sector will now be hoping for much better as they look to Genel Energy’s (LON:GENL) drilling of the SM-1 well.

Drilling work began last week on the well which also involves San Leon Energy (LON:SLE), Serica (LON:SQZ) and Petromaroc (CVE:PMA) with stakes of 8.5%, 5%  and 1.5% respectively.

Here, drilling is located in the Sidi Moussa block and it is targeting a 300mln barrel oil target. The programme is expected to take between two to three months.

Kosmos Energy, which sunk one of the previously unsuccessful wells, is drilling again later this year and, in early 2015, Pura Vida Energy (ASX:PVD) and Freeport will begin a two-well programme.

Meanwhile, for investors still holding Tangiers shares after today’s sell off the obvious question would be what is next for the company?

In terms of the Tarfaya block and offshore Morocco time will be needed to pick over the results and for the operator to carry out an analysis of what it means for the wider acreage (8 permits spanning 11,281 square kilometres, or an area equivalent to 50 North Sea blocks).

More broadly it is understood that Africa remains an area of interest for the company, which amid management changes, withdrew from a takeover of ASX-listed Jacka earlier this year.

Naturally investors can expect to learn more of the company’s plans in the coming weeks once the dust has settled on the TAO result.

View full 88E profile View Profile

88 Energy Ltd Timeline

Related Articles

picture of wind turbines
January 11 2018
The construction of more than 600 wind turbines was funded by securing US$1bn of financing during the year.
oil and gas operations
January 04 2018
Phase 1 of the Otakikpo field is targeting 10,000 bopd of production, with Phase 2 due to raise the bar to 20,000 bopd.
oil and gas operations
May 01 2018
It was a year of portfolio building and progress for the onshore UK-focused minor, punctuated by improved production volumes and a number of acquisitions with value-adding potential

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use