New Exploration Concession
January 22 2003 - 2:10AM
UK Regulatory
RNS Number:4649G
Fusion Oil & Gas PLC
22 January 2003
Fusion Oil & Gas plc
("Fusion" or "the Company")
Award of New Exploration Concession
Fusion today announces that it has signed a Petroleum Concession Contract with
the Agence de Gestion et de Cooperation entre la Guinee-Bissau et le Senegal
("AGC") the joint commission established to administer the maritime border zone
between Senegal and Guinea Bissau. The contract relates to a nearshore area to
be designated the Dome Flore Concession, which covers an area of approximately
1,600 square kilometres and includes the Dome Flore and Dome Gea oil
accumulations which were discovered in 1967 and 1970 respectively. Water depths
in the permit area range from the shoreline to in excess of 100 metres. Fusion
has been awarded this permit as a result of an application made during an open
bidding round.
Fusion's equity in the petroleum contract is 85%, with the remaining 15% being
held by L'Enterprise AGC S.A. which is the commercial arm of the AGC. The
contract has three exploration terms, the initial term being for three years and
the two subsequent terms for two years each. Fusion will be acquiring 3D seismic
data during the first term to evaluate several prospective features, some that
display direct hydrocarbon indicators on existing seismic data.
The permit is situated immediately to the east of Fusion's existing exploration
interests in the AGC administered area, the deepwater Croix du Sud (Amerada Hess
operated) and Cheval Marin (AGIP operated) permits.
Previous drilling has established that the Dome Flore acreage has access to a
world class petroleum system, which has generated significant quantities of oil.
Most of the oil discovered to date is heavy crude which would be uneconomic to
develop with current technology. Since discovery of the Dome Flore and Dome Gea
accumulations, much of the subsequent activity focussed on potential development
of these heavy oil reserves. Fusion however will focus primarily on exploration
for light oil within this prolific system. Indications of light oil have been
encountered in both Tertiary and Upper Cretaceous reservoirs during previous
drilling on Dome Flore and Dome Gea, and regionally in Lower Cretaceous
reservoirs.
Estimates of oil-in-place in the Dome Flore and Dome Gea accumulations range
between 500 million to in excess of 1 billion barrels. The oil is trapped in
very shallow reservoirs associated with salt diapirs where the heavy nature of
the crude is thought to be because of biodegredation. The initial volume of
oil-in-place before biodegradation would have been significantly larger which
gives an indication of the prolific nature of the source rock. The Dome Flore
petroleum system is driven by the same regional Cenomanian-Turonian source rock
system that is proven to be effective offshore Mauritania. Fusion's work
elsewhere in the AGC area also suggests that there are deeper source rocks in
the Aptian and Albian which could have a significant effect on prospectivity.
Of the thirteen wells and one corehole in the block, most were shallow tests
drilled between 1967 and 1971, with only two wells drilled in the last thirty
years. A 3D seismic survey acquired in 1992 was unable to accurately image the
deeper reservoirs where biodegredation is less likely to occur. Considerable
advances in seismic technology over the last ten years particularly related to
seismic imaging of salt diapirs will be utilised by Fusion to reassess the
prospects over and around these complex structures.
Veritas DGC Limited has commenced acquisition of a 3D survey over the Dome Flore
and Dome Gea accumulations on behalf of Fusion using the MV Seisquest. The
acquisition parameters will be fully optimised for the deeper exploration
objectives and the whole volume will undergo pre stack depth migration. Fusion
is already exploiting these technological advances in its exploration projects
in Gabon.
By acquiring optimal 3D seismic data processed using state of the art
techniques, Fusion believes it is possible to explore this prolific petroleum
system with fresh insight. The opportunity to accelerate the 3D seismic
programme should enable an inventory of potential shallow water drilling targets
to be developed before the end of 2003.
Alan Stein, Managing Director of Fusion, commented:
"Exploring for light oil in Dome Flore has been one of our new venture
objectives for some time and we are delighted to be able to announce the
acquisition of this exciting new project. The opportunity to apply proven
advances in seismic technology in a world-class petroleum province where there
has been only sporadic exploration activity for the last 30 years is unusual.
That this opportunity should occur in a basin where Fusion has developed core
expertise creates a compelling investment case. Increased industry activity in
Northwest Africa has also meant that we have been able to benefit from seismic
vessel availability to accelerate our work programme on commercially
advantageous terms. "
22nd January 2003
For further details please refer to the company's web page www.fusionoil.com.au
or contact:
Fusion Oil & Gas plc Tel: +61 89 226 3011
Alan Stein, Managing Director Fax: +61 89 226 3022
Australia e-mail: astein@fusionoil.com.au
Peter Dolan, Chairman Tel: 020 8891 3252
England Fax: 020 8891 1555
e-mail: peter@fusionoil.demon.co.uk
College Hill Associates Tel: 020 7457 2020
James Henderson Fax: 020 7248 3295
Justine Hibbert e-mail: James.Henderson@collegehill.com
e-mail: Justine.Hibbert@collegehill.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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