Serowe Coal Seam Gas (CSG)- Botswana
Highlights - Serowe CSG Project Farmin
- Earn up to 75% of the Serowe Coal Seam Gas (“CSG”) Project in the Kalahari Basin CSG fairway in Botswana, Africa.
- Strata-X will operate the Project covering two licenses spanning 273,000 acres.
- The Project has a mean estimate of 1075 PJ of recoverable prospective resource net to Strata-X’s interest. (1)
- There are immediate and expanding domestic southern Africa energy markets.
- Botswana rated as an attractive investment destination.
ASX disclosure note - 5.28.2 - The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.
In November 2016, SXE entered into a Farmin Agreement with Magnum Gas and Power (ASX:MPE) for a staged farmin to earn up to 75% of the Serowe CSG project located on the Kalahari Basin CSG Fairway in Botswana, Africa. Strata-X will operate the Project which spans approximately 273,000 acres and has certified 1075 PJ of recoverable Prospective Resources (1)
The Republic of Botswana is one of the oldest democracies in Africa becoming independent in 1966. It has a long-standing rule of law and the lowest rate of corruption in Africa. The geography of the Project area is predominantly flat with good road access. These factors combined with a 3 % government royalty on produced gas makes Botswana one of the more favorable economic settings in the world. The growing demand for power in the country and its neighbors offers immediate and expanding domestic gas markets.
The Farmin is in three stages and the Company has up to 3 years to complete all stages with each stage earning the company a 25% working interest in the Serowe CSG Project. The first stage will begin in January of 2017 and will involve the desorption analysis of 3 CSG core wells as required for continued gas resource certification. In addition, one well will be completed and production tested. Stages 2 and 3 are optional and the decision to proceed to these stages will be based on the results of the prior stages.The final 25% (third stage) working interest is earned when 100 PJ of 2P reserves are certified for the project
(1) Prospective Resources figures are from an audit report prepared by MHA Petroleum Consultant dated 26 October 2016 following their audit of the available technical data including the geological interpretation, information from relevant nearby wells, analogous reservoirs and the proposed program for the Project, prepared and presented to MHA by Strata-X. Stated Prospective Resource figures are Best Estimate – undiscovered natural gas quantities and net of a 6% royalty and are shown at a 75% working interest in the Project that Strata-X will only earn upon completing the farm-in program. For addition information see Strata-X November 2016 Presentation.