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Pura Vida Energy (Proposed ASX:PVD) is an African explorer with a substantial acreage position off the Atlantic coast of Morocco, known as the Mazagan Offshore Area. Mazagan has been independently certified to contain potential resources of greater than one billion barrels of oil. The company is progressing its exploration activities…
Australian Stock Exchange-listedPura Vida recently announced the farm-out deal with Freeport-McMoRan on its Mazagan asset in Morocco.
Proactive Investors (PI) caught up with Damon Neaves, managing director of Pura Vida(ASX:PVD), at the Oil Council even in London, to seek more information on the deal.
PI: Would you explain a bit more what the deal means for investors in Pura Vida?
Damon: For us, this is the realisation of the vision we had when we founded the company two years ago, to be free-carried in a high impact multi-well programme. It’s great to be able to achieve that in that time horizon.
We’ve now received the upfront cash payment from Freeport, so we’re sitting with US$20 million cash at bank. We’re fully funded for the work programme across all the blocks in the portfolio, and importantly it means we now head into the drilling phase.
Next year, we’ll start a two well programme in Morocco, fully funded up to a cap of US$215 million. It’s an exciting time for Pura Vida and as I said, a realisation of that vision that we had from the very beginning.
PI: Let’s get a bit more detail on what is next, because you outlined briefly where you’re going to go with all this, but what should investors watch out for in terms of news headlines and milestones?
Damon: Well, the big news will be the drilling in Morocco. Our first well there is targeting a structure with a mean resource potential of 1.5 billion barrels, so that’s a big well. We’ll follow it up with a second well in Morocco. Again, both wells are funded under that farm-out transaction with Freeport.
What we’ve managed to do in the meantime is diversify the portfolio and we’ve picked up a block offshore Gabon earlier this year, then, very recently, acquired a third block offshore Madagascar. The block in Gabon – we have a 20 million barrel discovery there. We’re looking at ways to appraise that field.
We want to put a production test on that field and commercialise that discovery, but we’ve also got big pre-salt potential in Gabon. There’s a 10-well drilling campaign under way in Gabon and Total has made a discovery with the first of those wells. It’s the first major discovery in the pre-salt in deep-water Gabon and that’s proving one of the main play types in our block, so, a very interesting start to the drilling.
PI: Looking out to 2014, what are the catalysts going to be and how big will Gabon be, do you think, set against the business in Morocco?
Damon: We hope to contract a rig shortly for that drilling campaign in Morocco. We’ll have visibility on the timing of those wells very soon. We’ve also got drilling under way in Morocco with other operators, spudding the first wells; they’re drilling at the moment. There’s now going to be continuous news flow as the programme of 10 wells unfolds there in Morocco.
It is a very similar situation in Gabon; we’ve got 10 wells over the next six to 12 months targeting, particularly, that pre-salt play in Gabon. Lots of approximate drilling results plus our own drilling. We’ll also be taking Madagascar through the seismic phase next year with both the 2D acquisition over the coming months, and later in the year a 3D seismic campaign as well.
PI: Broader portfolio, that’s the message then, for investors?
Damon: Yes. Well, for us the strategy from the beginning was about funding Morocco; we’ve achieved that. The second stage of the growth strategy is about diversifying and building a portfolio around that. It’s pleasing to see we’ve done that successfully over the 18 months that we’ve been listed.