White Nile set to start drilling for oil in Southern Sudan
Dec 22, 2005 (LONDON) — White Nile, the AIM-quoted company chaired by former Middlesex and England cricket star Phil Edmonds, expects to start drilling for oil in Southern Sudan early in 2006.
The oil and gas exploration group, which has so far raised £16 million in the City, generated no revenue in the year to 30 June and made a loss of £394,039.
But the former spin bowler says a lot has been achieved since the year end, including a seismic programme on Block Ba in Southern Sudan which covers 67,000 square kilometres, roughly the equivalent of 328 North Sea blocks.
The shares are at 96.5p. There were no early deals.
Edmonds says Southern Sudan is an established petroleum producing area including part of the continent-wide Cretaceous rift basin system that has proven reserves in Chad and Niger.
Sudan’s current daily oil production of around 500,000 barrels is expected to rise by 20% in 2006. The current proven reserves are 1.2 billion barrels. The largest, estimated at over 10 billion barrels, are in the Muglad Basin.
Although Southern Sudan is not exactly the most stable part of Africa, progress has been made since the January peace treaty. A new constitution for Southern Sudan was signed in Juba, the South’s administrative capital, on 5 December.
Six days after White Nile (WNL) raised £9 million and was admitted to AIM on 10 February, it announced a deal with the government of Southern Sudan and its national oil company, Nile Petroleum Corporation. In return for a 60% interest in Block Ba, White Nile issued Nile Petroleum with 155,000,000 ordinary shares equivalent to a 50% interest in the enlarged company.
As the Nile Petroleum deal was large relative to the size of the company, shares were suspended until it could finalise a formal admission document.
Nile Petroleum was allowed to appoint two representatives to the White Nile board. But nothing happened until 14 July when two non-executive directors were named, Lual Acuek Deng, the State Minister of Finance, and Edward Abyei Lino, a director of Nile Petroleum and director of security for the Regional Development Corporation of Southern Sudan.
A ten-year exploration and production licensing agreement for Block Ba was signed on 25 April. There was a competing claim from the French oil company Total, but White Nile believes it has security of tenure.
Since then Edmonds says White Nile, which has moved its head office from Johannesburg to Nairobi, has been working closely with its partners, ?the new government and people of Southern Sudan’.
The production fairway of the Muglad Basin extends into the western side of Block Ba and means the area with the greatest potential could be at least 6,000 square kilometres.
On 17 June, White Nile asked the Canadian registered company Terra Seis Geophysical to evaluate Block Ba. Terra Seis, a subsidiary of Terra Seis International, has since established a camp in Southern Sudan at Padak, two kilometres from the airstrip in the western section of Block Ba.
Information is now being gathered to help identify drilling targets and survey and drill equipment, explosives, ARGO’s, airboats, generators, accommodation and trucks are in place. A forward camp has been established at Panyong north of Padak for drilling activities. Drilling is expected to start early in 2006.
This followed the raising of an additional £7 million from both existing and new institutional shareholders on 28 June through the issue of seven million new ordinary shares of 0.1p each at £1 a share.
Meanwhile in July, White Nile agreed with the Ethiopian mining ministry to look into the Southern Rift Basins, an area of around 70,000 square kilometres adjacent to Petronas’ Gambela Block in the north and bordering Southern Sudan and Kenya to the south. Over the coming two years White Nile will evaluate its oil potential.
(Citywire/ST)