Introduction

The large and highly prospective Saouaf licence covers an area of over 4,000 km2. In a recent CPR published by Blackwatch Petroleum Services, the independent consultant has ascribed nearly 2 TCF of gas across 12 separate structures to Saouaf. These leads and prospects are concentrated in the Cretaceous Aptian Serj and Senonian intervals and the largest prospect, Bou Dabbous Flower, is estimated to contain over 800 BCF of gas alone.

On 24 December 2018, Upland announced that it had been formally awarded the highly prospective Saouaf licence located in northern Tunisia. Saouaf is strategically situated in a region of highly developed gas production infrastructure and is estimated to contain up to 2 TCF of gas across a dozen exciting potential drilling targets. Within this portfolio, the existing Dekrila discovery is a primary target for further appraisal work and is estimated to contain over 227 BCF of recoverable gas resources.

Under the terms of the agreement with the Tunisian government, Upland has agreed to conduct exploration work over an initial two-year licence period, which will include acquiring 300 km of new 2D seismic and reprocessing existing seismic data on the licence.

Work on the licence will be conducted as a 50:50 joint venture with Tunisian state oil company, ETAP, whereby Upland will meet all exploration and appraisal expenses and in the event of a discovery, ETAP reserves the right to take a participating interest up to 50%. At this stage, ETAP agrees to pay its corresponding share of past costs and also fund its share of future expenditure.

 Saouaf is understood to be a highly prospective licence with substantial volumes of estimated recoverable gas from several conventional targets. Within at least a dozen potential accumulations, the primary target on the licence is likely to be the existing Dekrila gas discovery made in the 1950s which was not developed at the time due to the lack of a viable gas market. This situation has changed significantly over the intervening period and the licence map below demonstrates that the major Trans Mediterranean (Transmed) gas pipeline, among others, now bisects Upland licence offering the opportunity to tie in future gas discoveries to existing local and international markets.

Gas prospectivity

 Although field visits by Upland have demonstrated the presence of additional surface oil seeps and the company’s competent person, Blackwatch Petroleum Services has indicated that there is a significant oil play on the licence, the recent technical fieldwork and subsequent analysis has confirmed a significant potential for gas within a wide portfolio of leads and prospects on the Saouaf licence. The map below depicts clearly the wide range of leads and prospects on the licence, many of which are situated in the Aptian (Lower Cretaceous aged rocks) horizon and the later Senonian interval, the final Cretaceous epoch from 88.5-65 million years ago. The licence contains the Bou Dabbous group of leads, the largest of which is estimated to contain over 500 BCF of gas within a single horizon and also the exciting Dekrila discovery which is estimated to contain over 227 BCF of gas.

The Blackwatch CPR, dated 24 December 2018, recognised reservoir facies in multiple formations including the Aptian Serj and the Senonian Aleg and Abiod carbonates which are considered the primary objectives on the licence. The map below depicts a series of large prospects and leads located in close proximity to the 48 inch Transmed gas pipeline which traverses the licence from southwest to northeast and the smaller 20 inch TRAPSA line which delivers gas to local markets in Tunis and Bizerte. Of particular interest is the Dekrila gas discovery located in the south central area of the permit. This discovery has demonstrated unstimulated gas flows from three Cretaceous pay zones and a potential deeper Aptian zone which is also believed to be gas prone.

Prospect inventory

Blackwatch has assembled a significant inventory of leads and prospects for the Saouaf licence based on interpretation of the available seismic data on the permit in addition to composite logs and completion for five wells in and around the licence area. Blackwatch was also able to review geology maps and reported well results for the Cap Bon gas field located to the northeast of Saouaf. Consequently, the CPR identified a total of 13 leads and prospects. Of these, 12 were considered gas prone and are outlined in greater detail in the table below. The table omits the single oil lead on the licence although Blackwatch has outlined that SNJ Prospect could contain prospective recoverable resources of up to 42 mmbbls.

Blackwatch estimates that the Saouaf licence could contain almost 2 TCF of gas across multiple leads and prospects in addition to the 42 mmbbls of potential oil resources already outlined. This is positive given that Upland had initially believed that estimated volumes would be considerably lower.

Saouaf terms and conditions

Upland Saouaf will act as operator with ETAP as its partner in a 50:50 joint venture arrangement. The company understands that this structure, along with the PSC arrangement, represents one of the two structures applicable to the grant of all hydrocarbon exploration and exploitation licences in Tunisia. Under the terms of the JV, Upland has agreed to fund all exploration and appraisal work on a 100% basis and in the event that the company makes a discovery, ETAP can elect, at its sole discretion, to take a participating interest of up to 50% in the development of a new discovery. At this point, ETAP would be obligated to pay its corresponding share of past costs to Upland and fund all subsequent expenditure in accordance with its equity interest. The licence is for an initial two year term and may be converted and thereby extended in term at Upland’s option as long as the work commitments for the initial term have been fulfilled on time.

Operator

Upland Saouaf act as operator with ETAP as its partner in a 50:50 joint venture arrangement.