May 10 (UPI) — Taking a stake in a deepwater oil prospect off the Namibian coast gives shareholders standing next to the biggest players, Canadian-focused Calima Energy said.
Calima took a 56 percent stake and will serve as the operator of an exploration block in the Orange River basin off the southern coast of Namibia. Several West African countries to Namibia’s north, like Senegal, are fast emerging as bright spots for future oil producers.
The broader West African basin is gaining a reputation as an emerging producer, and Senegal in particular could hold more than 1.5 billion barrels of oil off its coast.
The main focus for Calima, for now at least, is in the Montney shale formation in British Columbia, where it said it planned to drill “several” wells later this year. With Exxon Mobil and Total taking an interest in Namibia, the company said its shareholders now hold a more prestigious position.
“This investment in Namibia provides shareholders with an interest in a high-profile emerging hydrocarbon province alongside major oil companies,” the company’s statement read.
The four-year term of the agreement obligated Calima to a minimum investment of $2 million. By comparison, Conoco Phillips in April spent $120 million to acquire 35,000 net acres in the Montney shale play in British Columbia to move alongside Calima.
Calima under the initial terms of its agreement in Namibia commits to acquiring seismic data of the offshore area in order to get a better understanding of the reserve potential.
“The investment obligations associated with the agreement are comfortably within the company’s financial capabilities,” Calima’s statement read.