Africa Oil AOI, Flying HIGH Today, Hitting New High of $9.73, Due to Discovering More Oil

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A Pipeline for Puntland  

Drilling partner Range Resources has announced confidence in its Puntland oil and gas exploration project in the Dharoor Valley Basin earlier this week, citing that a commercial discovery is highly likely.

 In an interview with OpenBriefing.com, Range’s managing director Peter Landau had this to say about Puntland. The same sentiments were also echoed by Keith Hill of Africa Oil, whose company was a joint explorer in the recent discovery of oil in Kenya’s Turkana County.

If the Shabeel-1 well successfully flows and the Shabeel North well delivers to current expectations, we would have discovered between 170 to 280mm barrels of recoverable oil in our first two wells (with 34 to 56mm barrels attributable to Range) with the remainder of the basin still to be tested. Investors must also remember the well’s proximity to the coast (approx 60 km) and the relative ease of constructing a pipeline to an offshore loading facility based on a commercial discovery.

This coincides with earlier speculation of a pipeline ending in Bosaso. Already an oil storage facility has been constructed on the beachfront of Bosaso, and continues to undergo construction. The bulk of the construction began in 2005 when Range Resources first expressed interest in Puntland. It was the first construction of a petroleum facility in post-war Somalia, and to date the only project of its kind.

To be talking of a pipeline this early in the process is very telling of the level of confidence in the wells, estimated to have a 75% success rate by Keith Hill.

Spudding of the anticipated Shabeel-North well is expected to occur in the next two to three weeks, and should be completed by the middle of August, after which both wells will be tested for quantity.