Mnazi Bay Concession
The Mnazi Bay exploration and production concession covers a 756 sq. km area in south eastern Tanzania, bordering Mozambique to the south and lying along the north eastern flank of the Rovuma River. In 1981, AGIP (now ENI) drilled a shallow water, off-shore well and discovered the Mnazi Bay Gas Field. However, due to a lack of a commercial gas market at the time, AGIP capped the well, leaving the wellbore integrity intact, and relinquished the concession.
In 2004, Artumas acquired the rights to the Mnazi Bay concession. With no signature bonus requirement, the Company committed to provide a gas-to-power energy solution for the Mtwara/Lindi region to replace their existing unreliable, aging system. This has become known as the
Mtwara Energy
Project.
New seismic data and interpretation indicates the Mnazi Bay Gas Field to be more than double the size of original estimates, covering some 75 square kilometers in aerial extent versus the original estimate of 34 square kilometres.
In 2005, Artumas re-entered, completed and tested the original AGIP Mnazi Bay #1 (MB-1) well. In 2006, Artumas drilled and completed the Mnazi Bay #2 (MB-2) well and spudded the Mnazi Bay #3 (MB-3)well, which was completed in February 2007. Both MB-2 and MB-3 were very successful gas wells, with improved structural position and thickening sands with excellent reservoir qualities. The tested flowrates in both wells showed high productivity with Absolute Open Flow (AOF) volumes ranging from 37 Million standard cubic feet per day (MMscf/d) to 280 MMscf/d depending on the sand horizon being tested.
Artumas commenced drilling the Msimbati – 1X (MS-1X) exploration well in February 2007. The well is targeting a new hydrocarbon play—the Upper Miocene K sand reservoirs—as well as testing the aerial extent of the Miocene/Oligocene reservoirs of the Mnazi Bay field (also referred to as the “Classic Sands”, proved up by the MB-1, 2, and 3 wells). If successful, MS-1X will prove up the new Msimbati Field and extend the Mnazi Bay field southeast.
Commercialization of Mnazi Bay Gas Field
Artumas has identified the primary commercialization opportunities for the Mnazi Bay natural gas reserves to be through conversion of gas-to-electricity for sale in the local, domestic and regional markets, and through off-take, direct use gas markets, including the potential for marine export of Compressed Natural Gas (CNG) for the East African gas markets. Direct gas use applications under consideration include cement manufacture, agricultural processing, petrochemicals, and gas-to-liquids. Longer-term, consideration will be given to LNG capacity development for distribution to the global gas markets, should the resource base accommodate this commercialization option.
Mnazi Bay Gas Resources*
Artumas has commissioned third-party engineering assessment of the recoverable gas resource volumes at Mnazi Bay. The most recent assessment was completed January 2007, using probabilistic analysis. The results are shown below:
| Billion Cubic Feet (Bcf) |
| |
P90 |
P50 |
Mean |
P10 |
| Original Gas in Place |
332 |
962 |
1542 |
3,509 |
| Recoverable Resources |
262 |
760 |
1218 |
2,772 |
| Million Barrels Oil Equivalent (MMboe) |
| |
P90 |
P50 |
Mean |
P10 |
| Original Gas in Place |
55 |
160 |
257 |
585 |
| Recoverable Resources |
44 |
127 |
203 |
462 |
* Artumas has undertaken considerable seismic and drilling activity in order to prove up the potential of the Mnazi Bay reservoir. The Mnazi Bay-1 well re-entry proved up an estimated mean value of 79 Bcf in gas reserves (62 Bcf recoverable). Third-party engineering assessment of the MB-2 and MB-3 well results, shown in the Table below, yield an additional 129 Bcf of recoverable gas resource or some 22 MMboe. Artumas’s seismic program has also identified eight additional leads, which upon exploration drilling, may have an impact on resource estimates.
| January MB-2 and MB-3 Results (from press release) |
| |
|
|
|
|
|
| Horizon |
MB-1
Production
test (Bcf) |
MB-2 DST
(Bcf) |
MB-3 DST
(Bcf) |
Total
(Bcf) |
Total
(MMboe) |
| "C" Sand |
--- |
--- |
27.4 |
27.4 |
4.6 |
| "D" Sand |
--- |
5.6 |
29.5 |
35.1 |
5.8 |
| "D & E" Sand |
79.0 |
--- |
--- |
79.0 |
13.2 |
| "F" Sand |
--- |
45.8 |
20.4 |
66.2 |
11.0 |
| "G" Sand |
--- |
28.2 |
24.4 |
52.6 |
8.8 |
| "I" Sand |
--- |
4.4 |
--- |
4.4 |
0.7 |
| |
|
|
|
|
|
| Total Resource |
79.0 |
84 |
102 |
265 |
44 |
| Recoverable Resource |
62 |
58 |
71 |
191 |
32 |
| Total Net Pay |
39 Ft. |
103 Ft. |
158 Ft. |
--- |
--- |
DST = Drill Stem Test
NT = Not Tested
1 Barrel of Oil = 6000 cubic feet of gas |