Frequently Asked Questions
ReconAfrica issued a news release regarding the Netherland Sewell Study, which confirms five potential conventional oil and gas reservoir rock zones in the first of our stratigraphic wells (6-2) in the Kavango Sedimentary Basin, Namibia. Following are answers to the most frequently asked questions regarding this study.
What is meant by water saturation? In the NSAI report it shows every reservoir as having water present.
According to the Society for Petroleum Engineers PetroWiki (https://petrowiki.spe.org/) “water saturation (S) determination is the most challenging of petrophysical calculations and is used to quantify its more important complement, the hydrocarbon saturation (1 – S).” In a conventional oil and gas reservoir, fluids occupy the pore spaces in a reservoir rock (porosity), with the fluids being water, oil and gas. The water saturation is never zero, and depending on the reservoir and fluid characteristics, oil can be produced under a variety of water saturations.
From PetroWiki: “Complexities arise because there are a number of independent approaches that can be used to calculate S. The complication is that often, if not typically, these different approaches lead to somewhat different S values that may equate to considerable differences in the original oil in place (OOIP) or original gas in place (OGIP) volume.” ReconAfrica uses the most rigorous core data analysis and petrophysical evaluation available to understand water saturation.
In the case of the 6-2 Well, in two of the zones there is clear reduced water saturation in the cores and log analysis, thus oil saturation. The potential productivity of these zones will continue to be analyzed but will ultimately require a production flow test to prove commerciality.
What is the difference between shows and reservoir rock?
Shows are oil extracted from rock samples and gas measurements captured while drilling, taken every three meters out of the drilling fluid flow line and analyzed by a third party, Horizon Well Services. Shows prove the existence of an active hydrocarbon system, and can be found in a variety of rocks, including ones that could be considered below reservoir quality. Reservoir rock is determined by core and log analysis, in our case by third parties (Netherland Sewell and Core Lab) and is more precise with logs measuring approximately to a half meter accuracy, and cores from a specific depth. Reservoir rock is a term used in conventional reservoirs to describe rock that can provide storage capacity for fluid and allow for fluid flow. Therefore the amount of reservoir rock is normally lower than that for shows as it comes from different data and sources, and eliminates rock that has storage and flow capacity below a threshold established by the third party.
What is ReconAfrica’s policy in regard to petroleum data?
In Namibia, the Petroleum Act, 1991, outlines that the control of and ownership of petroleum data vests in the Government of the Republic of Namibia under the custodian of the Minister of Mines and Energy (MME), by virtue of the powers given to its officials. The data is confidential for a period of 5 years.
There are circumstances under which ReconAfrica, NAMCOR and MME may share, publish and/or reproduce petroleum data which are:
a) NAMCOR and/or ReconAfrica may share, publish and/or reproduce petroleum data when consent is obtained from the Minister of Mines and Energy
b) NAMCOR and/or ReconAfrica may provide the data to an affiliate, assignee, professional advisor, bank or financial institution, contractor, any stock exchange for purposes of complying with securities law or a court of competent jurisdiction to comply with a court order.
c) NAMCOR and/or ReconAfrica may trade data with third parties in accordance with normal petroleum industry practice provided consent is obtained from the Minister of Mines and Energy.
This policy is very consistent with oil and gas laws in jurisdictions where the sovereign owns subsurface rights. ReconAfrica’s policy is to strictly honour applicable law. For well data, ReconAfrica will capture all the data from all sources at the end of each well program, and transfer data to the MME. After official acceptance, a request for the release of data under certain circumstances (as per above) can be made.
FAQ: Recent Technical Update from ReconAfrica
ReconAfrica issued a Press Release and subsequent posting of mudlogging data to our website on August 5, 2021. We are grateful there has been considerable interest in these results and are now providing answers to the most frequently asked questions.
There was a lot of technical data included in last week’s update. What’s the biggest takeaway?
With the data from the 6-2 well accepted by the Namibian government, ReconAfrica now can release data about the well in accordance with the terms of our Petroleum Agreement. The key takeaway is that the 6-2 well showed evidence of hydrocarbons over more than 250 meters (820 feet) in three potential reservoirs. Further, the data shows these hydrocarbons have migrated and were not generated where they were found (in situ), which provides convincing evidence of a conventional petroleum system. The data was gathered and assessed by a third-party expert, Horizon Well Logging, which has vast experience in conventional oil and gas exploration. This data fully supports the movement to our next phase in the evaluation of the Kavango Sedimentary Basin – the acquisition of 2D seismic data, which began in July.
What is the intent of the stratigraphic test wells; and has this been achieved?
The goal has always been to prove there is an active conventional petroleum system in the Kavango Sedimentary Basin. The released data analysis confirms this. In conventional oil and gas systems, petroleum migrates along faults, fractures, or porous rock from a source to a reservoir. These intervals in the 6-2 well can represent either residual oil, i.e. oil left behind in migration through a reservoir, or reservoired oil, that could be potentially produced. While we are not yet able to delineate which of these scenarios we have discovered, we are certain that we have revealed a conventional petroleum system. In an unconventional petroleum system, the source rock is also the reservoir rock, without any migration, which would call for unconventional means of extraction.
What was your rationale for not drilling to total vertical depth of 12,500 feet on the 6-2 well?
The wells were permitted to the conservative maximum depth that the drill rig could achieve. As the first wells in this basin, and with the nearest control well more than 375 km away, we wanted a permit to drill as deep as we could safely. Our well plan called for controlled drilling, at a set rate, with an overweight drilling mud, that would keep the hole stable, while also suppressing gas shows. After drilling through the major intervals of hydrocarbon shows on the 6-2 well, the frequency of potential faults began to increase; to be safe, we opted to suspend drilling at a shallower depth. The well is cemented in a state that will enable us to re-enter for potential production testing or resume drilling if needed.
What is a mud log and what information does a mud log report disclose?
‘Mud Log’ refers to the sample logging of the rocks being drilled and a continuous measuring of the gas. As the well is drilled, chips of the rocks in the well (samples) are transported to the surface by the drilling fluid system. A portable laboratory is onsite and is staffed by geologists who specialize in wellsite work; the company we used, Horizon Well Logging, has been in this business for 25 years, with extensive experience in Africa. As part of the logging process, samples are described every three meters; any samples that have evidence of oil are described, and then the oil itself is extracted and rigorously evaluated for quality on spot dishes. ‘Spot dishes’ are used for this purpose: they are laboratory-quality porcelain plates. Every test is performed in a fresh, clean spot dish. They are rigorously cleaned between uses to remove all stains and fluorescence. Removal of any remnant fluorescence is easily confirmed in the fluoroscope before each use. Solvent is regularly checked to verify lack of contamination. This process and results are documented by Horizon and the description is available. There were 52 intervals with hydrocarbon shows in this first well.
The gas is sampled directly from the flowline and sent to a chromatograph, which measures the amount of gas and some basic properties. The chromatography data shows the intervals where gas was detected, and basic trends in the composition of carbon compounds in these intervals. The trends come across quite clearly in relative strength, although absolute units are on the low side. The low absolute readings can be due to: 1) the ‘heavy’ nature of the drilling fluid (mud) used in the well to suppress the gas entering the wellbore (this does not affect the oil samples which are in the rock samples); 2) the oil itself being low in gas by its nature; and 3) the potential that this is residual oil, i.e. oil left behind in migration through a reservoir in route. Residual oil is a telltale sign of a conventional oil and gas system, and one will find this as well as trapped hydrocarbons around any conventional oil province.
What reservoir rock qualities do you expect from the Core Labs data, what do you hope to learn from them, and when do you envision receiving them?
The Core Labs data will provide specific composition and property analysis of the potential reservoir rocks in the well, both sandstone and carbonate. These are termed static rock properties. This data is critical to calibrate the wireline logs for analysis, in particular as this is the first modern well in onshore Namibia. The Core Labs data won’t affect our conclusions regarding the presence of a conventional hydrocarbon system; the well sample show data provides this, and the core data is focused on rock properties. For the 6-2 well, there were considerable logistical challenges and delays in transporting the cores from the wellsite in Namibia to Houston, Texas due to COVID-19 restrictions. We are now conducting extensive analysis, which is estimated to be completed in early September.
According to the Jarvie Report, there is clear evidence of migrated oil, not source rock? Why is this important?
We have looked at the Kavango Sedimentary Basin as a conventional oil and gas province, which is how all oil and gas basins begin their productive life. We drilled the 6-2 well as a conventional stratigraphic test well, on a structural high, expecting hydrocarbons that have migrated to this location from source rocks, either deeper or laterally some distance away. The Jarvie Report provides this conclusion and confirms our premise that the basin has a conventional hydrocarbon system.
What is the purpose of the 2D seismic program, and how will the results be used in combination with the vertical seismic profiling tools that are planned to be run in both wells?
The two stratigraphic test wells provide very detailed information at the specific locations of those wells. The seismic data provides a less detailed but broader image of the subsurface across a much larger area. The Company’s initial program comprises 450 kms of seismic lines. Results from the 2D seismic are designed to delineate traps which serve as potential hydrocarbon bearing reservoirs. More specifically, a vertical seismic profile is run in each well to provide seismic data at the wells, and bridge between these two scales of data. This will allow the seismic data to be interpreted and calibrated to the well data and provide a meaningful interpretation of the actual structure locally and across the basin, and potential trap (field) locations and extents.
Will there be more data and analysis coming from ReconAfrica?
Yes. In addition to future data results announced via news releases to the media and the public, there will be two presentations at industry forums by our technical staff in September 2021, a virtual presentation at the Petroleum Society of Great Britain/Houston Geologic Society Africa Conference September 14–15, and at the Frontier Africa E&P Summit in London September 22–23 (links will be posted when available). We look forward to presenting the exciting findings to these industry forums and answer any other questions shareholders and stakeholders may have.
What types of rocks (lithologies) were encountered in the 6-2 well?
The 6-2 encountered a diverse rock column. The upper part of the well is a clastic (sandstone and shale) interval. The middle section is dominantly carbonate (limestone, siltstone, and dolomite), and the lower section is dominantly limestone. The hydrocarbon shows are seen in all three sections of the well. There are no ‘tight shale’ intervals in the well.
FAQ: ReconAfrica Initial Drilling Project
Who is ReconAfrica?
ReconAfrica is an oil and gas company engaged in the exploration and development of oil and gas in NE Namibia and NW Botswana. The company began work in Namibia in 2013, and has been diligently pursing the analysis and evaluation of PEL 73, in conjunction with our local partner Pioneer Energy.
What is the project’s goal?
The project’s initial goal is for the drilling of two or three stratigraphic test wells for data gathering to understand the geology and confirm the existence of a working petroleum system.
Are the drilling sites near any environmentally sensitive areas?
No. The drilling locations are more than 50 km south of the Okavango River. The sites are not located in the area of any National Parks, Conservancy or World Heritage sites.
Will local ecosystems be protected?
Yes. We will follow global best practices and local regulations in all drilling and reclamation activity. There will be no damage to the ecosystem from the planned activities.
Have Members of the government, affected communities and civil society been kept well informed about this program?
Yes. ReconAfrica is dedicated to complete transparency and meeting/exceeding all government requirements for the project. Strong local engagement, hiring and training policies are already in place in conjunction with local and regional government.
What is the status of activity in Botswana for ReconAfrica?
The Botswana licence was recently acquired in June 2020. ReconAfrica is now advancing the regulatory process beginning with the Environment Impact Assessment.