Madagascar Oil S.A provides Operational & Development Planning Update

Madagascar Oil S.A (MOSA) has announced that it continues to have an active and very positive dialogue with OMNIS, the Ministry to the Presidency of Mines and Petroleum and also representatives of the office of the President of Madagascar, with regard to the approval process for the Tsimiroro Development Plan TDP.

Subject to the approval of the TDP and the award to OMNIS (L’Office des Mines Nationales et des Industries Strategiques) of an Exploitation Mining Title, the Block 3104 PSC will enter into its exploitation period, with a minimum term of 25 years.

“We have had extensive and very positive discussions over the past few months with OMNIS and Madagascar Government representatives on our Tsimiroro Development Plan.  As this is considered by the Madagascar authorities to be a project of national state importance, we fully understand the cautious and measured approach they are taking and are grateful for the extensive resources they are devoting to this process,” says company CEO Robert Estill.

Phase 1a of the TDP will fully develop the geological compartment containing the existing SFP area.  It is planned that long-lead orders will be placed for drilling under Phase 1a of the TDP and SFP facilities upgrade equipment/materials for a planned 2015 work programme following approval of the TDP.

Madagascar Oil adds that based on expected 6-9 month delivery times for these long-lead items, Phase 1a development drilling could commence as early as late 2015, adding to production from the existing SFP wells.

Phase 1b will follow Phase 1a and is designed to develop an additional geological compartment to allow sales volumes to reach 10,000 BOPD.

As per the development evaluation programme the TDP described a range of thermally effective Oil in Place derived by MOSA for the Block 3104 Tsimiroro Main Field, Amboloando heavy oil resource.

This range is described as: Low: 1.33 Billion Barrels, Best: 1.80 Billion Barrels and High: 2.45 Billion Barrels.

These “thermally effective oil in place” figures are based on the Main Field Amboloando reservoir geological interpretation completed in 2014.

The first of the 30 DEW (DEW15-11) was drilled in February was fully cored over the target oil bearing reservoir section and drilled successfully to the planned Total Depth of 265 metres and was also designed to test the capabilities of locally sourced drilling and core-handling crews ahead of the main DEP.

The remainder of the wells will be drilled in the dry season which is expected to commence in late March/early April 2015 with the DEW well campaign will complete in Q3 2015.

The new application of the ground magnetometer survey method of igneous dyke detection was extended over parts of the Phase 1 and Phase 2 intended development areas under the TDP in September-November 2014 with the processed data yielding clear imaging of the dyke network which compartmentalises the reservoir.  This should allow the steam flood pattern of wells to be aligned with the dyke matrix.

The DEW and ground magnetometer survey data will be incorporated into the revised geological modelling to advance reservoir development planning beyond the Phase 1a development area.

‘We continue to make good progress on Steam Flood Pilot operations and the data we are gathering is proving to be extremely useful as we move towards the development phase of the Block 3104 Tsimiroro field. Our ongoing Development Evaluation Programme will provide further important data to allow us to determine the optimal drilling locations for our development phase,” adds Estill.

Blocks 3105, 3106 & 3107

Separate exploration reports have been completed on each of blocks 3105, 3106 & 3107, by UK-based Subsurface Consultancy, ERCL. The reports summarise completed subsurface work including the revised geological interpretations and also describe the hydrocarbon prospect and lead inventory of each block. Exploration work programmes to mature the prospectivity are described in each report.

As announced by the Company on 15 December 2014, MOSA has formally requested a two year extension of the exploration periods for Blocks 3105, 3106 and 3107 from the Madagascar authorities.  This formal request was made ahead of the scheduled end date of the current exploration periods of 14 December 2014 and the Company is hopeful of receiving these extensions in the near future.

Block 3102 (Bemolanga)

The Operator of Block 3102 (Bemolanga) License, Total E&P Madagascar S.A.S (“Total”), presented the 2015 annual work programme and budget to the Madagascar authorities and to MOSA in December 2014.  The 2015 work programme is aimed at maturing leads on the block to plan for a seismic acquisition programme in 2016.  The proposed 2015 budgeted work is fully covered by the terms of the existing Total carry of MOSA costs.