Block 2B South Africa - February 2020 www.panoroenergy.com - Panoro Energy
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Block 2B South Africa
February 2020 www.panoroenergy.com
Panoro Farm into Block 2B South Africa
• Panoro has signed a Farm Out Agreement with Africa Energy Corp.
(“AEC”), part of the Lundin Group of Companies, for a 12.5%
interest in Block 2B located in the Orange Basin, offshore the west
coast of South Africa.
• The exploration block is an exciting rift basin oil play, with an
existing oil discovery and near-term plans to drill a well to prove up
material additional resources.
• The Gazania-1 well is targeting best estimate gross prospective
resources of 349 million barrels of oil*
• Panoro will carry AEC subsidiary for up to $2.5 million of their share
of drilling costs.
• The well is expected to be spud as early as Q4 2020 depending on
regulatory approvals and rig availability.
• Separately, AEC has announced a farm-out whereby Azinam Limited
will take a 50% share and operatorship of Block 2B.
• Completion of transaction is subject to consent of Minister of
Minerals and Energy of South Africa and Azinam farm-out
becoming effective; approval process is anticipated to take
approximately 6 months. * These volumes are estimates of Africa Energy and have not been subject to
assessment by a qualified third party resource auditor.
2020 Corporate Presentation Slide 2
South Africa Overview
Attractive Location / Fiscal Terms
ACTIVE PLAYERS
FISCAL TERMS
State Take < 30%
Royalty: 0.5-5%
Income Tax: 28%
Tax benefit from cost uplift
After Tax Profit
Tax Deductible Costs:
Including cost uplift, 200% of exploration & appraisal,
150% of capex & 100% of opex
State and Black Economic Empowerment (BEE) Participation:
• 10% State back-in rights / 10% BEE participation rights
• Draft Upstream Petroleum Resources Development Bill proposes an increase
in State Participation from 10% to 20%
2020 Corporate Presentation Slide 3
South Africa Block 2B
Proven Oil Basin
• A-J1 oil discovery in 1988 flowed high-quality oil to surface (36° API)
• Near-term low-risk exploration well planned updip from discovery
• Analogous to Lokichar Basin (Kenya) and Albertine Graben (Uganda)
ASSET SUMMARY
Panoro Energy interest (following approval) 12.5%
Partners (following approval) Africa Energy (27.5%), Azinam (50%), Crown (10%)
Basin Orange Basin
First well Gazania-1
Planned spud date As early as Q4 2020, dependent on approvals and rig avail.
Water depth 150 m
First well prospect size, Africa Energy estimates 349 MMbbl (1)
Well cost estimate ~$21 MM
Play type Rift basin
Min. commercial field size < 50 MMbbl at $60/bbl (2)
Work program to date 686 km2 of 3D seismic
Seismic data 3D survey by Western Geco 2013
(1) Best Estimate Prospective Resources - 200 MMbbl have been subject to resource assessment
by qualified third-party resource auditor.
2020 Corporate Presentation Slide 4
(2) Africa Energy estimate.
Block 2B South Africa: Exploration well to target 349 million barrels*
Proven Oil Field With Significant Upside Shown On Seismic, Avo Support
• Soekor drill AJ-1 well and find N S
37 mmbbl of oil at 36 API
1988
• No further data available, sanctions,
discovery largely forgotten by industry
Pelargonium
• Seismic imaging shows that the
intersected reservoir plus neighboring
2013-
reservoirs could contain of ca.
2016 400 million barrels*of oil in areas with
very good reservoir qualities
• Gazania-1 to be drilled as early as late
2020** targeting updip section of the
discovered reservoir and overlapping
2020/21 potential reservoirs
• Upside to 1 billion barrel of total oil on
the licence according to Africa Energy*
• These volumes are estimates of Africa Energy and have not been subject to
assessment by a qualified third party resource auditor.
• ** subject to approvals and rig availability
2020 Corporate Presentation Slide 5
A-J Graben Dip Line
Source Rock Model and Migration A-J1
E W
Namaqualand Prospect
Top of Oil Window,
3 km, 80°C
1
Gazania Prospect
2
A-J1 SR interval 2900-3400m (500m)
140m net SR material with TOC up to 5.5%. Type I.
3 Early mature. Oil sourced from a more mature, deeper source rock
Base of Oil Window, 4
A-J1 Oil inclusions from 3050 down to 3660m
5.2 km, 135°C (600m), suggesting charge from another, lower SR. 2 km
2020 Corporate Presentation Slide 6
Up to 1 billion barrels gross prospective resources in license*/**
A-J Graben Contingent & Prospective Resources
Gross 2C
Contingent Best Estimate Prospective Resources A-J Graben Prospect Map
Resources
1,000
400 MMbbl Northern
Graben
Un-risked Recoverable Oil Resources (MMbbls)
800
Pelargonium
600
225 MMbbl
400 MMbbl
High Est.
400
186 MMbbl A-J1 well Axial Delta Play
37 MMbbl Contingent,
163 MMbbl Prospective
200
163 MMbbl
118 MMbbl 3C Proposed well
-
37 MMbbl location
A-J downdip P50 Gazania Pelargonium Namaqualand Eastern Margin Prospects 3D Seismic Required
Ursinia
A-J Graben Axial Delta Play Prospects
Discovery and Prospects* A-J Graben** Northern Graben**
Other A-J Graben Prospects
* These volumes have been subject to a resource assessment by a qualified third party resource auditor on behalf of Africa Energy Corp. These volumes have been disclosed as an
arithmetic sum of multiple estimates of contingent and prospective resource, which statistical principles indicate may be misleading as to volumes that may actually be recovered.
** These volumes are Africa Energy Corp estimates and have not been subject to assessment by a qualified third party resource auditor.
2020 Corporate Presentation Slide 7
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