Area 2 lies within the emerging South Africa and Namibia (SANAM) super-basin. (Image source: Impact Oil & Gas)

Impact Africa Ltd by Impact Oil & Gas Limited has entered into an agreement with Silver Wave Energy Pte Ltd to acquire its entire interest (10%) in Area 2, offshore South Africa

Impact currently owns a 90% participating interest and operatorship in Area 2, acquired from Silver Wave Energy in 2020. Following completion of this transaction, the company will own 100% of Area 2. 

Last month, Africa Energy Corporation announced move for a complete ownership of Block 11B/12B offshore the Republic of South Africa, as TotalEnergies EP South Africa BV and QatarEnergy International E&P LLC called quits from the region. 

Area 2 sits outboard of, and compliments, Impact’s Transkei & Algoa blocks, off the east coast of South Africa. Together, the blocks extend the entire length and breadth of the deepwater part of the east coast margin, covering a combined area of approximately 125,000 sq km across a very exciting frontier exploration area, with plays extending across both blocks.

Closing of the transaction is subject to customary conditions, including the approval of the Government of South Africa.

High-calibre exploration block

Area 2 lies within the emerging South Africa and Namibia (SANAM) super-basin, which stretches from northernmost Namibia to the Durban Basin of eastern South Africa. The Block shares the same prolific petroleum play as is currently being successfully explored in the Orange Basin of Namibia, and further proven by the Brulpadda and Luiperd discoveries in South Africa’s Outeniqua Basin. Impact believes that all of these areas share common world-class Cretaceous source rocks and similar giant stratigraphic traps. It is expecting higher quality Cretaceous reservoir sands in Area 2 than those currently explored in the SANAM super-basin.

Siraj Ahmed, CEO of Impact Oil & Gas, said, “We are pleased to have concluded this agreement with Silver Wave Energy and thank the Silver Wave team for their collaboration over the past four years. As the holder of 100% of this high-calibre exploration block, we are particularly excited with the opportunity for this area to contain a very similar play to that which has brought Impact so much success in the Namibian Orange Basin.”

Following completion of this transaction, Impact will hold 100% participating interest and operatorship in Area 2. In the adjacent Transkei & Algoa blocks Impact holds a 45% participating interest and BG International Limited, a wholly owned subsidiary of Royal Dutch Shell plc, holds a 55% participating interest and Operatorship. 

The Petroleum Agency of South Africa (PASA) has been particularly active since 2022 for the promotion and optimal development of on- and offshore oil and gas resources on behalf of the government, seeking geophysical contractors to acquire fresh seismic data in the Orange, Bredasdorp, Durban and Karoo basins.

DeepSea Mira contract extended. (Image source: Adobe Stock)

Northern Ocean Ltd has announced an extension of the contract with a subsidiary of TotalEnergies SE for continued work in Africa using the Deepsea Mira

The firm term of the contract is extended from October 2024 for one well and provides one additional well option. The extension from October provides firm revenue backlog of approximately US$24.3-34.2mn with the option to extend for an additional well potentially adding a further backlog of approximately US$26.9-36.9mn.

Collaboration in petroleum, natural gas and infrastructure were explored. (Image source: Minister of Petroleum and Mineral Resources)

Egypt's Minister of Petroleum and Mineral Resources Karim Badawi received Dimitrios Copelouzos, chairman of the Greek Copelouzos Group, and Ioannis Karydas, CEO of the Group for Renewable Energy, Energy Storage and Interconnection

Areas of potential collaborations and investment opportunities available in the petroleum sector, natural gas and infrastructure were explored.
Badawi confirmed that Egypt's oil sector is conducting intensive research to increase exploration programmes. The plan is to achieve new discoveries that can potentially lead to increased production. The gfovernment is also working towards meeting local demand to relieve pressure on the import bill.
Badawi emphasised Egypt's strong infrastructure that has the potential to make it a regional energy centre. He confirmed that work is underway to explore investment opportunities in the hydrocarbons sector to serve the diversification of energy resources. The country is ready to initiate a multi-phase green hydrogen project that involves bp and Masdar, among others. 

Strong natural gas infrastructure

Copelouzos confirmed that Egypt is able to create a bright future in the field of natural gas by taking advantage of the strong infrastructure it has, especially the gas machine factories. This established the Group's interests to participate in any new tenders that Egypt might launch in the near future. He also referred to the electrical interconnection project between Egypt and the European Union among the most significant ones currently being implemented in Europe.
The meeting was also attended by Yas Mohamed, head of the Egyptian Natural Gas Company, and Moataz Atef, assistant head of Egas for the technical office, Special Projects and Operational Safety. 

In April, the Ministy of Petroleum and Mineral Resources signed a memorandum of understanding (MoU) with Equador, which was keen on exploring the North African country's oil and gas resources. 

Vaalco's focus for the second half of 2024 will be the preparation for major projects.

VAALCO Energy reported operational and financial results for the second quarter of 2024 

George Maxwell, VAALCO’s Chief Executive Officer commented, “We had another strong quarter operationally and financially, closed on a highly accretive acquisition and continue to focus on profitably generating cash flow to fund future projects, while maintaining our commitment to meaningful shareholder returns through our quarterly dividend policy. We are very pleased with the solid results from our Canadian drilling program, which improved our liquid mix considerably in the second quarter as we had three of the four wells come in with higher-than-expected IP30 rates. We closed the Côte d‘Ivoire transaction on April 30, had a lifting there in May and collected payment in June.”

“Looking at our highly accretive Côte d’Ivoire acquisition, we recognized a $19.9 million non-cash bargain purchase gain, which benefited our second quarter earnings, but it’s the strategic opportunities that provide VAALCO another strong asset to support future growth that we are most excited about. We are very pleased with the results of our third-party reserve engineer’s calculation of proved reserves as of December 31, 2023 that shows even greater reserves than we initially disclosed, up approximately 30% from our initial disclosure. This strategic and highly cost-effective acquisition strategically expands our West African focus area with a sizeable producing asset that has significant upside potential and considerable future development opportunities in Côte d’Ivoire, a well-established and investment-friendly country.”

“The focus for the second half of 2024 will be the preparation for major projects expected to deliver a step-change in organic growth across the portfolio in 2025. We expect to see an increase in capex investment through the second half of the year associated with these numerous projects including the drilling campaign in Gabon and the FPSO upgrade in Cote d’Ivoire. We are excited about the future and plan to continue to generate strong operational cash flow to fund our impressive organic opportunities moving forward, while continuing to return capital to our shareholders through the quarterly dividend.”

In Egypt, VAALCO focused on enhancing production in the first half of 2024 through a series of planned workovers, as well as through interventions using the OGS-10 rig. VAALCO finalised the K-81 recompletion at the start of the first quarter which was a carry-over from its 2023 drilling activity. The EA-55 well, drilled in October 2023, was fracked and put online in January 2024. Three additional workover recompletions were completed in the second quarter with one more in progress. With the low cost of workovers, the well economics are strongly positive.
In Gabon, the company is currently finalising locations and planning for the next drilling campaign at Etame that is expected to occur early in 2025.

In Côte d'Ivoire, the Baobab production shutdown took place successfully and as per plan between March 21, 2024 and April 13, 2024. All nine operational production wells were successfully restarted in mid-April with flush production rates of just over 21,000 BOEPD, which has since stabilized to around 18,000 BOEPD.

During the second quarter, one lifting took place in May of 655,715 gross barrels or 211,294 net barrels to VAALCO, achieving a price of $81.70 per barrel.

Work with Modec, the operator of the Baobab Floating Production and Offloading Vessel (FPSO), on the drydocking project for the FPSO, projected to be offline in 2025, continued in the second quarter of 2024. The operator is currently preparing detailed project timetable and costings for the partners and regulator; however preliminary work including the execution of a letter of intent with Modec on April 4, 2024 which covers the key contracts to be executed, including vessel purchase, EPC, and O&M amendments, as well as selection of the disconnect and reconnect contractor, and support for the revised yard bid from Dubai dry docks among other activities. Additionally, in the second quarter of 2024, the outstanding tank inspections continued in preparation for the dry dock.
Svenska Acquisition

VAALCO closed its acquisition of Svenska for the net purchase price of $40.2 million, on April 30, 2024 after certain regulatory and government approvals were received.