Tsimiroro Block 3104

The Tsimiroro oil deposit located in Block 3104 is estimated to contain several Billions of barrels of oil.

Based on data from the 144 wells drilled up to 2010 and the cyclic steam stimulation pilot operated in 2008, Netherland, Sewell and Associates, Inc. certified a contingent oil in place of 1.7 billion barrels across the Tsimiroro main field area.

The development mining title over Block 3104 also covers appraisal activities of conventional light oil potential in the areas to the south of the Tsimiroro main field.

844
Tsimiroro

Background

Oil was discovered in shallow formations as long ago as 1909 when wells were drilled to trace the source of the many natural surface oil seeps found in the area.

Due to the combination of oil viscosity and shallow reservoir the oil did not flow naturally to surface and therefore development of the oil resources was not feasible until the wide spread familiarity with thermal EOR technologies in the 1960’s and 1970’s.

During the period from 1970’s through to 1990’s numerous international oil companies including [Chevron, Shell, and Hunt Oil] sought to establish a commercial development project at Tsimiroro. These attempts suffered from a combination of lack of corporate focus / pririty, absence of commercial technologies / practices, and a very low oil price environment.

When Madagascar Oil took over the license in 2004 the Company focused on field-testing of thermal recovery techniques through pilot operations.

Block Appraisal

Madagascar Oil has focused on the shallow Amboloando sandstone in an area that is now called the Tsimiroro Main Field. As well as significant geological field and desk-based studies. Over 200 wells have been drilled to define the extent of the resource.

In 2008 successful Cyclic Steam Stimulation (CSS or “Huff and Puff”) Pilot operations carried out on three wells demonstrated that steam injection would stimulate oil production at rates equivalent to those in analogous international thermal EOR projects.

On the back of these results a 25 well, 9-pattern 5-spot steam flood pilot was designed, constructed and commerce operations in April 2013.

This Steam Flood Pilot enabled the Company to assess the response of the Tsimiroro heavy oil resource and the Amboloando reservoir under sustained and continuous Steam Flooding.

The Steam Flood Pilot operation ran until March 2016 producing in excess of 250,000 barrels of crude. Of these approximately 100,000 barrels of crude was burned to generate the steam for the Steam Flood and power for the field operations.

The technical performance of the Steam Flood Pilot was within the range typically achieved by many international commercial steam flood oil fields.

Oil Quality

The Amboloando horizon exists at a shallow depth in the Tsimiroro Main Field area and near surface alteration of the oil trapped in the sandstone over geological time has resulted in oil of 14-16° API gravity. The oil has low sulphur content of around 0.3 % and also has low asphaltene and vanadium content making the oil desirable in the international market.

The oil is highly suited for refinery feed-stocks as well as a potential fuel for electrical power generation and marine engine use. Field upgrading and marine terminal blending with light oils provide value enhancement opportunities that can be factored into the field development.

Elsewhere in the license, deeper reservoir targets exist that if oil traps occur may hold light and medium grade oil.

Oil Resource Base and Upside Potential

Independent certification has identified an Oil-In Place resource base of 1.7 Billion Barrels in the Main Field Amboloando reservoir. This is available for thermal recovery methods with upside potential in areas of the Main Field not yet covered by the wells drilled to date.

Reservoir quality distribution in the other sandstone layers is being further appraised and understanding of the Isalo-1 and Ankaramenabe sands where oil is encountered in the Main Field area will be an early area of focus.

In the southern half of the license area, two gravity highs will be subjected to early appraisal in the development phase. Oil has been encountered in the Amboloando horizon of the “Tsimiroro South” structure and light oil shows reported in deeper horizons in wells drilled between 1909 and the 1960s require further verification through new seismic acquisition and drilling. A larger gravity anomaly further south in the license corresponding with a Basement high currently has just two existing seismic lines and no well penetrations.