Swala Oil & Gas Tanzania Plc will push ahead with drilling plans in the East African Rift system this year, undeterred by the recent collapse in oil prices.
The operator with 50% stakes in the Kilosa-Kilombero and Pangani licenses is analyzing technical data before starting drilling for oil by February 2016 at the latest, CEO David Mestres Ridge said by email.
“The results in Kilombero are particularly interesting, with a string of structures extending northeast and southwest of our Kito structure,” Ridge said.
The drop in crude to below $50/bbl has forced many drillers to reconsider the high costs of exploration in Africa after a dash for resources that saw billions of dollars in investment to tap promising fields from Ghana to Tanzania. Swala is moving ahead with plans after raising $3.6 million in an oversubscribed IPO last year.
“We have a commitment to drill two wells and that remains our plan,” Ridge said. “You have to bear in mind that oil prices are cyclical, and have been lower recently—in the $30s in 2008 and below $10 per barrel in 1999.”
Swala, a unit of Swala Energy Ltd., is looking at options including issuing new shares to finance drilling, Ridge said.
Tanzania, which produces small amounts of natural gas for domestic use, has the potential to become a gas exporter, according to the U.S. Energy Information Administration. The country doesn’t produce oil, and there haven’t been any commercial discoveries recently.
Recommended Reading
CEO: Coterra ‘Deeply Curious’ on M&A Amid E&P Consolidation Wave
2024-02-26 - Coterra Energy has yet to get in on the large-scale M&A wave sweeping across the Lower 48—but CEO Tom Jorden said Coterra is keeping an eye on acquisition opportunities.
The One Where EOG’s Stock Tanked
2024-02-23 - A rare earnings miss pushed the wildcatter’s stock down as much as 6%, while larger and smaller peers’ share prices were mostly unchanged. One analyst asked if EOG is like Narcissus.
Hess Corp. Boosts Bakken Output, Drilling Ahead of Chevron Merger
2024-01-31 - Hess Corp. increased its drilling activity and output from the Bakken play of North Dakota during the fourth quarter, the E&P reported in its latest earnings.
Matador Resources Declares Quarterly Dividend
2024-02-14 - Matador Resources will pay a $0.20 dividend on March 13 to shareholders of record by Feb. 23.
Sherrill to Lead HEP’s Low Carbon Solutions Division
2024-02-06 - Richard Sherill will serve as president of Howard Energy Partners’ low carbon solutions division, while also serving on Talos Energy’s board.