Scirocco Energy PLC (AIM:SCIR) has noted the update on the Ruvuma project from Aminex, the Tanzania-based oil and gas exploration and development company.
Analysis conducted by ARA Petroleum Tanzania (APT), the operator of the Ruvuma Production Sharing Agreement (PSA), in collaboration with Ikon Geoscience, has led to a substantial upward revision of the Gas Initially In Place (GIIP) for the Ntorya gas discovery.
The most likely estimate now stands at 3.45 trillion cubic feet (Tcf), a major leap from the previously estimated 1.64 Tcf by RPS Energy in its 2018 Competent Person's Report (CPR).
Seismic data has further revealed the presence of additional gas-charged reservoir sandstones, suggesting the possibility of even larger gas accumulations beyond the high-confidence areas previously identified.
This has led to the prospect of further exploratory success, particularly with the anticipated drilling of the Chikumbi-1 (CH-1) appraisal well, which could elevate the GIIP volume for the Ntorya accumulation to up to 7.95 Tcf.
Moreover, the broader Mtwara Licence area, as illuminated by the 3D seismic data, exhibits significant undrilled exploration potential, with multiple structural and stratigraphic plays estimated to contain a total unrisked GIIP potential of 16.38 Tcf, including Ntorya.
As part of the ongoing efforts to bring the Ruvuma project to fruition, APT is actively engaging with Tanzanian authorities to secure the Ntorya Development Licence, which will pave the way for a series of development activities aimed at commercialising the gas discovery.
These efforts include the contracting of a rig for the CH-1 appraisal well, repairs to existing wells, and support for the construction of a gas pipeline to facilitate gas extraction from the field.
The goal is to initiate gas production at a rate of up to 60 million standard cubic feet per day (MMscf/day) from the Ntorya field, contributing significantly to Tanzania's energy security and economic development.
Tom Reynolds,chief executive of Scirocco commented: "This update provides further confidence that we will realise the upside potential of our Ruvuma divestment through the contingent payments given the sheer scale of the project.
“We note the delay to first gas which pushes back that first contingent payment into 2025 but the key takeaway for us is the progress towards the development of this high-quality asset, which in turn will provide transformative payments for Scirocco over time.”