Tower Resources PLC (AIM:TRP) told investors it is delighted by the news that Shell has mad a significant oil discovery in Namibia, which adds confidence across the region.
Shell and its partners Qatar Energy and Namor (the National Petroleum Corporation of Namibia) struck oil in the Graff-1 exploration well, in both primary and secondary targets.
Tower noted that, citing media reports, the well is said to have encountered at least one 60-metre layer of hydrocarbons, estimated to host some 250mln to 300mln barrels of light oil. Shell is meanwhile reportedly planning a follow up well to determine the size and recoverable potential of the discovery.
Graff-1 proves a working petroleum system for light oil in the Orange Basin.
More specifically, Tower highlighted that the Shell results would appear to indicate (if press reports are correct) that a “slope channel system with a stratigraphic trap has enabled successful migration of oil into a potentially commercial scale reservoir”.
This point, according to Tower, is encouraging for further plays of the same type in both Namibia and South Africa – like those in the company’s exploration portfolio.
"We are delighted by the Graff-1 discovery, for the Republic of Namibia and our partners at Namcor, and also for the greater confidence that this discovery gives us in our own Namibian Blocks,” said Tower chief executive Jeremy Asher.
“As Immanuel Mulunga, managing director of Namcor, has said, this should put to rest any remaining doubts about the hydrocarbon potential of Namibia.
“We hope that this discovery will bring prosperity to Namibia, and that the further exploration and appraisal activity it generates will also reduce costs and provide further insights to assist all of us exploring in the area."
With some 18,637 square kilometres Tower has the third-largest net acreage position offshore Nambia, behind Exxon and AIM-market peer Eco Atlantic Oil & Gas.