Impact Oil & Gas is planning to raise up to N$1 billion from existing shareholders for further drilling to value the oilfield off the coast of Namibia.
The Africa-focused exploration company said proceeds from the capital raise, together with existing cash reserves, will be used to fund the upcoming appraisal programme in Namibia, following the Venus discovery announced in February 2022, and other exploration activities, into early 2023.
“The expected proceeds of up to US$60 million from the Open Offer, together with existing cash reserves, represent the majority of the Company’s anticipated funding requirement for the next 12 months. These funds should provide sufficient capital to secure the Company’s funding requirements for the majority of the appraisal programme costs,” the company said.
“An appraisal well and a re-entry into Venus-1X is being planned, with spud expected in Q3 2022. The operator plans to conduct flow tests on both wells. The joint venture will also continue to progress its exploration activities on Blocks 2913B and neighbouring Block 2912, including the acquisition of a 3D seismic survey.”
The Venus-1X discovery well was drilled by TotalEnergies on behalf of the joint venture group comprising TotalEnergies (40%), QatarEnergy (30%), Impact (20%) and state owned NAMCOR (10%).
“We are excited to be preparing for the appraisal of the world class light oil and associated gas discovery in Venus-1X, expected to commence only seven months after the initial discovery was announced. This is remarkable progress that reflects the commitment of the joint venture to accelerate the de-risking and commercialisation of the Venus discovery. We are grateful to our shareholders, who have steadfastly supported Impact through a difficult period in the industry, and are grateful for their continued support in this capital raise,” Siraj Ahmed, CEO of Impact Oil & Gas said.
The Venus discovery sits in the Orange Basin, approximately 290 kilometres off the coast of Namibia, in the deep offshore.
The well was drilled to a total depth of 6,296 metres, by the Maersk Voyager drillship, and encountered a high quality, light oil-bearing sandstone reservoir of Lower Cretaceous age, with 84 metres of net oil pay.
Impact Oil & Gas announcement comes after global energy research and consultancy group Wood Mackenzie recently noted that Namibia’s oil discovery might be Sub-Sahara Africa’s biggest to date and estimates over US$ 3.5 billion annually in taxes and royalties for the Namibian government.
The firm also expects Namibia to be the third largest oil producer in the region within 10 years, producing 250,000 bpd in its first phase (to be the third biggest oil producer in Africa, Namibia would have to produce about 2.8 million bpd currently).
At the same time, Namcor estimates that the country could generate over US$5.6 billion in annual revenues from oil, according to a Bloomberg interview.
Since independence, exploration companies have invested more than N$30 billion in Namibia, according to the Namibia Petroleum Operators Association.
