Ireland-based Falcon Oil & Gas has signed an agreement with Chevron Business Development South Africa to jointly explore Karoo Basin in South Africa.
Under a technical cooperation permit (TCP), Falcon has received the exclusive rights to explore about 7.5 million acres in the southern part of the Karoo basin.
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The new agreement allows Falcon and Chevron to work exclusively for a period of five years and carry out exploration work in the Karoo Basin.
Covering about two thirds of the country, the Karoo Basin is spread across 236,000 square miles, of which the southern portion, covering 70,800 square miles, has vast shale gas reserves.
A substantial portion of Falcon’s TCP, about 11,719 square miles, is within the prospective area, along the southern boundary.
Permian-age Ecca Group includes three potential gas shales in the Ecca Formation, of which the most productive is the highly organic-rich, thermally mature shale of the Whitehall Formation.
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By GlobalDataComposition and thickness of this unit is uniform and can be found across most of the Karoo Basin.
The Lower Ecca Group shales hold about 1,834 trillion cubic feet of risked gas, while risked recoverable shale gas prospective resources of 485 trillion cubic ft in the Karoo Basin.
Chevron will pay $1m in cash to Falcon to cover past costs as well as to initiate work to secure exploration permits.
Falcon CEO, Philip O’Quigley, said that the agreement with Chevron represents the potential of the company’s significant acreage position in the Karoo Basin which is held under a TCP.
"Chevron has over 100 years of experience of working in South Africa but even more importantly has extensive experience in commercially and sensitively developing unconventional oil and gas resources," added Quigley.
