Woodside Relinquishes Option to Take Majority Stake in Orange Basin Block

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Woodside Relinquishes Option to Take Majority Stake in Orange Basin Block

Woodside Energy Group Ltd. has opted not to exercise a right to farm into Production Exploration License (PEL) 87 on Namibia’s side of the Orange Basin. Under a March 2023 deal, PEL 87 operator Pancontinental Energy NL granted the fellow Australian company an option to obtain a 56 percent stake in the offshore block, to […]

Woodside Energy Group Ltd. has opted not to exercise a right to farm into Production Exploration License (PEL) 87 on Namibia’s side of the Orange Basin.

Under a March 2023 deal, PEL 87 operator Pancontinental Energy NL granted the fellow Australian company an option to obtain a 56 percent stake in the offshore block, to be taken from Pancontinental’s 75 percent interest. That was in exchange for Woodside fully funding a $35 million 3D seismic survey.

Ahead of the option’s expiry in May, Woodside has now notified Pancontinental it will not proceed with the farm-in, Pancontinental said in an online statement Tuesday.

The decision also cancels a potential acquisition by Pancontinental of a one percent stake from co-venturer Custos Investments (Pty.) Ltd. The one percent acquisition had been agreed with Custos in tandem with the agreement with Woodside to allow Pancontinental to have a 20 percent interest in the block should Woodside chip off Pancontinental’s 75 percent stake and leave 19 percent.

As it stands Pancontinental keeps its 75 percent ownership. Custos retains 15 percent. National Petroleum Corporation of Namibia owns the remaining 10 percent.

“Pancontinental has prudently prepared for the possibility that Woodside may elect not to farm into PEL 87 and a process is already underway to secure an alternate farmin partner to fund exploration drilling within PEL 87 at the earliest opportunity”, Pancontinental said. “The Company has received third party interest and, given the Company’s low quarterly cash burn, remains well funded to progress the farmout process (31 December 2024 cash balance $3.6 million)”.

The joint venture retains access to the collected data, which showed “significant hydrocarbon prospectivity” after nearly 6,600 square kilometers (2,548.27 miles) of work, Pancontinental said.

“PEL 87 is the only permit not held by a major oil and gas company that is adjacent and on trend to the giant Mopane discovery”, it noted, referring to an asset operated by Galp Energia SGPS SA.

In a concurrent report, Pancontinental updated its net prospective oil estimate for PEL 87 to 3.8 billion barrels in the “high case” scenario.

“[T]he Company has independently progressed interpretation of the PEL 87 intra-Saturn exploration inventory to include six additional leads, with the Oryx and Hyrax features now considered by Pancontinental as prospects”, the company said.

Pancontinental sees “giant potential with the figures comparing favorably to significant discoveries on-trend to the south”, commented chief executive Iain Smith.

Pancontinental director Barry Rushworth said, “These results verify the Saturn Complex as a highly attractive exploration play, particularly given the significant size of the targets and major discoveries that continue to be made to our south within a comparable geological setting”.

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