(Sharecast News) - Oil and gas explorer Eco Atlantic announced the arrival of the 'Island Innovator' semi-submersible drilling rig on Block 2B on Tuesday, and the start of operations on the Gazania-1 exploration well.
The AIM-traded firm holds a 50% working interest in, and is the operator of, Block 2B.
It said the drilling location is 25 kilometres offshore the Northern Cape in South Africa's Orange Basin, in about 150 metres of water.
The Gazania-1 exploration well was being drilled to a depth of around 2,800 metres through a multi-zone pay section.
Eco Atlantic said the well was being drilled up-dip of the AJ-1 discovery well on the block, which proved approximately 50 million barrels of contingent resources.
The Gazania-1 prospect was targeting more than 300 million barrels of light oil.
Pending discovery in the vertical section, the joint venture partners had the option to directionally drill a second sidetrack well from the main well bore.
Both the vertical well and the sidetrack optional well would be logged and then plugged back to surface, the well would be sealed, plugged and the casing cut off below surface.
No equipment would remain on the seafloor, Eco Atlantic confirmed.
The joint venture partnership over Block 2B consisted of Eco Atlantic, as well as Africa Energy with a 27.5% working interest, Panoro Energy subsidiary Panoro 2B with a 12.5% interest, and Crown Energy with a 10% interest.
"Drilling Gazania-1 offers a significant opportunity to South Africa to open up the Orange Basin," said co-founder and chief operating officer Colin Kinley.
"A number of prior discoveries in the region are changing the understanding of this basin both in South Africa and Namibia where recent multi-billion-barrel discoveries have opened the gate to a new era of economic and resource opportunity.
"The discovery at AJ-1 is extremely helpful in creating the opportunity on the Gazania-1 well that we are confident that the decades of science will prove out."
Kinley said the well was being drilled to define the opportunity and the initial path in the basin, adding that it was "strictly" an exploration well.
"Once we have defined the resources here, South Africa and the joint venture partners will make its choices and we will determine the next stage of development.
"We are entering an exciting and busy period of drilling and work programmes and we look forward to updating the market, our partners and all stakeholders in the coming weeks on our progress and the Gazania-1 exploration well results."
At 1328 BST, shares in Eco Atlantic Oil & Gas were up 7.36% at 35p.
Reporting by Josh White at Sharecast.com.
Eco (atlantic) (ECO)