Header Image
News Room / Petro Viking Energy Presents Exceptional Risk-Reward Scenario -- Namibia Geographically Positioned to Mirror Oil-Laden Brazil

Petro Viking Energy Presents Exceptional Risk-Reward Scenario -- Namibia Geographically Positioned to Mirror Oil-Laden Brazil

The risk-reward characteristics are highly advantageous for investors establishing a long position in Petro Viking Energy Inc. (TSX-V: VIK) (Pink Sheets: PVEIF) as Namibia has attracted attention from the world’s largest oil companies, with BP Plc (BP) and Repsol SA (REP) acquiring licenses on the belief that Namibia’s coastal shelf mirrors that of Brazil, where the 2007 Tupi discovery in the Santos Basin was the Americas’ biggest offshore find in three decades yielding ~8 Billion bbls oil. The coast of West Africa is undergoing increased offshore oil exploration with major oil producers in the area looking to establish a presence in highly prospective licenses. Petro Viking Energy is focused on offshore oil exploration in Namibia, where its offshore block No. 1710 (~7,000 sq km) is highly prospective for major oil discovery as it appears to have ideal features and is geographically positioned location-wise as mirroring the prolific oil-laden Santos and Campos Basin of Brazil.
A location map showing VIK.V’s 1710 claim in relation to others may be viewed at http://www.energymarketwatch.net/vik.htm online.
Dr. Marcio Rocha Mello, Ph.D., Founder of HRT Participações em Petróleo S.A., geologist at Petrobras for 24 years, has been quoted on several occasions saying he thinks Namibia has more oil than Brazil. According to Mello, during a technical program at Offshore Technology Conference Brasil (OTC Brasil; one of the world’s foremost events for the development of offshore resources in the fields of drilling, exploration, production, and environmental protection) in October 2011 said the Santos, Espirito Santo, and Campos basins comprise one giant petroleum system, which he collectively referred to as the Greater Campos. Subsalt finds in recent years in ultra-deep formations in the Santos basin in particular reveal ‘a very thick and rich source rock’ related to the petroleum system HRT is currently studying in Namibia’s offshore basins. The OTC session entitled ‘South America and West Africa: Petroleum Systems and Geological Differences or Similarities’ also included talks by Joao Amaral (Total; the fifth largest publicly-traded integrated international oil and gas company) on presalt plays in the conjugate margins and Webster Mohriak (HRT) on subsalt exploration in Brazil and Angola. In short, When combining datasets from Brazil and West Africa, HRT has identified four definitive oil families (1) Marine Deltaic Tertiary, 2) Marine Anoxic Albian-Cenomanian, 3) Lacustrine saline oil type, and 4) Lacustrine brackish/saline oil type) in both regions and the oil found in Namibia has the same characteristics as the oil families found in Santos basin reservoirs. An extensive rifting system that extends from the southern part of South America to West Africa has evolved into a massive deepwater carbonate system where thick salt depositions and similar source rocks can be found in counterpart basins across the South Atlantic realm.
Most of the Namibia’s offshore has miles-thick shale formations acting as a seal over the oil-bearing strictures instead of thick pre-salt layers. From an exploration standpoint the shale cap makes for better seismic and better drilling conditions as shale tends to be more transparent to seismic energy, which makes for better resolution of the deep structures and allows for more accurate drill-hole placement.
HRT has identified large prospects in three of its offshore Namibia blocks which it has referred to as ‘unrisked prospects’; HRT has targets in the Upper Cretaceous turbidite sandstones, as well as the syn-rift carbonates and sandstones that are analogous to the Tupi and Jupiter fields in southern Brazil. In August 2011, HRT raised its net potential oil resources to 7.9 Billion boe following a DeGolyer & MacNaughton study of its offshore Namibia assets. As for the region as a whole, the HRT has projected as much as 50 Billion bbl of recoverable oil.
Petro Viking Energy (VIK.V) is also looking to secure additional offshore acreage in Namibia as part of its strategy of making VIK.V leveraged to impending demand. Prime offshore licenses hold the potential to hold billions of barrels of oil and translate to multiple increases in share price valuation for respective publicly traded license holders. One example (of several possible scenarios) as to how Petro Viking’s offshore license(s) may be meaningfully advanced in a value-added fashion without diluting the share structure can be found in the arrangement earlier this year between BP and Serica Energy Plc (SQZ). In March 2012 BP expanded its investment in Namibia by buying into Serica Energy Plc (SQZ)’s offshore blocks via taking 30 percent of the license in exchange for covering past costs and pay for 3D seismic survey.
Namibia’s offshore is only now taking centre stage as a deepwater petroleum frontier and Petro Viking’s Namibia offshore licenses are certain to attract attention as this vastly underexplored region heats up in planned activity by majors. VIK.V's offshore block No. 1710 is located on the northern tip of Namibia in the Namibe Salt Basin, directly adjacent Angola (Africa’s second largest oil producer). The Angola coast mirrors Brazil's oil-laden offshore sub-salt geology and the similar system is understood to continue into Namibia where VIK.V's block 1710 is one of only ~6 blocks in the country that are known to contain sub-salts of significance.
It is only in the last couple years that Namibia's offshore blocks have attracted a flurry of seismic exploration work from top geologists and teams from big-oil players (i.e. Petrobras, HRT, BP, etc.), yet only ‘now’ are the exploratory wells set to be spud; multiple deepwater offshore drill programs by majors are planned over the next year and are sure to put the whole map on fire when/if they hit. Big-oil caliber involvement in the region signals the area ‘in-play’ and the prospects for VIK.V advancing 1710 in a meaningful way via the involvement of suitors is strong (it is safe to say interest is already high), especially given the fact VIK's 1710 block is considered one of the best offshore blocks in Namibia.
Petro Viking Energy Inc.'s offshore 1710 block possesses essential features ideal for oil exploration; including 1) sub-salt (which would have helped dissipate heat millions of years ago and keep the hydrocarbons as oil plus help provide structure & seal), 2) numerous large structures interpreted by geologists from NAMCOR data, and 3) evidence of oil seepages and slicks offshore that indicate a working petroleum system in the region. Additionally, neighboring Chariot Oil & Gas recently spud on its 1811A block and demonstrated source rock and structure.
With ~30.4M shares outstanding and trading under CDN$0.20 VIK.V is poised for significant upside revaluation. The good share structure was one of the attractive features that helped VIK.V attract its Namibia asset (and possibly others to come) -- VIK.V has liquidity but is not over diluted and NO cheap in-the-money nonsense on the books; funds that would flow back to Petro Viking upon warrant exercising: ~13,000,000 warrants available to be exercised, all between $0.50 - $0.55 (with the exception of a nominal 102,000 warrants that are available to exercise at $0.20) would create ~$7m in cash for treasury. See news regarding pending $3M financing which will increase share outstanding by ~17M. In light of the highly prospective nature of its Namibia asset, possibly more to come, and multiple catalysts in the neighborhood, it is not unreasonable for shares of VIK.V to move significantly higher. Petro Viking has solid management and technical leadership with invaluable connections in Namibia and also has some revenue producing assets in Canada where it is averaging ~100 barrels of oil/day production. Although the stable revenue VIK.V receives is nice to see, it is important the reader note that Petro Viking is now positioned as a 100% Namibia focused offshore exploration opportunity with exceptional prospects and near-term catalysts.
This release may contain forward-looking statements regarding future events that involve risk and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual events or results. Articles, excerpts, commentary and reviews herein are for information purposes and are not solicitations to buy or sell any of the securities mentioned. Readers are referred to the terms of use, disclaimer and disclosure sections located at the above referenced URL.
Contact Information:
Fredrick william., Associate Editor
Market Equities Research Group