Canadian junior Octant Energy is preparing the ground to begin drilling and seismic campaigns in Kenya this year, while also gearing up for a later exploration programme across the border in Tanzania.

After a six year wait for the right acreage to come along and to get its broad strategy in place, Octant founder and chief executive Rick Schmitt said: “We’re moving along at quite a clip at the moment.”

Schmitt said the aim is to drill a pair of back-to-back exploration wells in coastal Block L17/18 in the second half of this year.

“Our priority is to drill two wells on oil prospects in L17/18, just south of Mombasa,” he added.

The first prospect to be drilled is located onshore while the second, sited offshore, is very likely to be reached via a deviated well drilled from land.

Schmitt — with decades of experience in the region after long periods with Occidental in Yemen plus Africa Oil and Black Marlin Energy in East Africa — said the source rocks are marine and “we believe we can discover non-waxy crude in very consistent reservoirs”.

L17/18 is located in the Tembo basin just 20 kilometres from the deep-water Sunbird-1 probe which found non-commercial volumes of oil a few years ago.

The two identified prospects — Wasin and Ksita — hold mean resources of 143 million and 156 million barrels, respectively, according to analysis from McDaniel & Associates.

Any oil found, pointed out Schmitt, would find a ready market because Kenya’s second city Mombasa lies within the block boundary. Two leads have also been identified in L17/18, which is covered by a production sharing contract that expires in April 2019 after Octant secured a two-year extension.

The targets to be drilled are the Wasin prospect and the Mombasa South West lead, which may hold about 100 million barrels of oil.

In the remote Block 1, which abuts the border with Somalia, Octant is keen to shoot 2D seismic over the 1200 square kilometre El Wak lead.

“We want to do a 300-kilometre infill survey,” said Schmitt, using a Canadian contractor called Polaris, which was about to carry out the same survey in 2015 when former block operator, Afren, collapsed.

Afren secured this block after acquiring Black Marlin in 2010.

“The (seismic) equipment is still stacked in Kenya and we will use the same Polaris crew,” remarked Schmitt.

El Wak is hugely enticing because it is an enormous, very well defined anticline with a seep recorded at its crest.

A provisional schedule calls for seismic to be shot this year followed by probes on El Wak and then the 187-million barrel Korof target in the south of Block 1, probably in 2019.

As with L17/18, Octant secured a two-year extension to the PSC for Block 1, which now expires in January 2020.

Asked about security issues in Block 1, given its proximity to Somalia, Schmitt said Octant has Kenya’s government and the local communities on its side.

“The communities were treated very well by Black Marlin and Afren and are keen to have us back. It also matters to (the government) that it gets that border area (with Somalia) stabilised," he said.

"We have been assured of all the support we need so there are no incursions during our seismic and drilling programme.

“We held a security meeting last month in a town right on the Somali border and we weren’t given any reason to worry,” he added.

If drilling is successful, Octant expects to find light oil in Block 1 because it is a continuation of Ethiopia’s Ogaden basin, where gas and condensates have been discovered.

Octant has a 100% stake in L17/18 and an 80% interest in Block 1 (Lion Petroleum has 20%) and while farm-outs are possible, Schmitt said no decisions have been made yet.

However, the situation is different for the Tanga block in Tanzania where more costly offshore drilling needs the support of an international oil company.

“We’re in contact with many (companies) active on Africa’s east coast,” said Schmitt.

Octant holds a 74% interest in Tanga — located in the Pemba basin immediately south of L17/18 — and is partnered by Petrodel.

An exploration well could be drilled in 2019 on the 95 million barrel Nanasi prospect, though five other promising structures have also been identified.

Octant has applied for a two-year extension to the Tanga PSA and hopes to secure approval shortly. On project economics, Schmitt said: “We can make money in the Mombasa blocks and Tanga at above $30 per barrel and not much higher than that in Block 1.”

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Octant sets sights on East Africa oil riches