Africa Oil Relinquishes Kenya’s Block 9

Block 9 operator Africa Oil has submitted a notice to the Government of Kenya relinquishing its interest in the block leaving Delonex as the only partner after acquiring Marathon Oil’s equity.

The two JV partners had until June 2018 to reevaluate and reprocess seismic and other data the Bogal-1 well which was plugged and abandoned with then operator CNOOC citing extensive fracture network proven by the abundant fluid losses during drilling and the Formation Micro Imaging (FMI) log.

According to Africa Oil the exit will result in a $44.7 million impairment of previously capitalized intangible exploration assets with the company’s operating expenses increasing to $44.8 million as compared to $1.9 million in the same period last year.

Earlier a source had told OilNews Kenya that it was unlikely to carry out any further drilling in the license until there is better understanding of the block with the block having huge contrasts that would necessitate further 3D seismic giving the likelihood of a relinquishment.

The block which has recorded two gas discoveries at the Sala-1 well and Bogal-1 well (Kenya’s deepest drilled onshore well) hit a dry well in the Sala 2 appraisal well designed to test the updip extent of this main reservoir sand with the well particularly focusing on gas tested at low rates at the lower interval of Sala-1.

Meanwhile the company received two quarterly payments of $18.75 million as part of the $75.0 million advance development carry in relation to the farm down to Total in Blocks 10BB and 13T.