Uganda
Global had an agreement with Neptune Petroleum (Uganda) Limited, a wholly owned subsidiary of Tower Resources plc (“Tower”), whereby Global had a continuing option to participate in Uganda Licence EA5 while having no current obligation to contribute to ongoing expenditure.
The agreement provided Global with a right to convert its investment in the project to date into a 25% legal and beneficial interest in EA5. Under the terms of the agreement, Global had the right to elect to participate until such time that Tower has obtained a firm offer of funds from a third party or through its own fund-raising efforts, to fund any material operation in respect of the Licence. Global would have been required to reimburse Tower for 25% of ongoing costs during the option period should it have elected to participate and, in the event of third party funding, Global would dilute proportionately with Tower.
EA5 is a 2,941 sq km licence area (reduced from 6,040 sq km following renewal in May 2010) situated at the northern end of the Albertine Graben in northern Uganda. Regional aeromagnetic survey identified that EA5 contains one of five identified sedimentary depocentres (or basins), called the Rhino Camp Basin, within the Albertine Graben and a programme of seismic interpretation and geochemical sampling was completed.
Global participated in the first two wells to have been drilled at EA5. Neptune drilled the first well Iti-1 in May 2009 and advised that the well, which was drilled to a total depth of 592 meters, did not encounter any producible reservoir sands at the location. Minor hydrocarbon shows were monitored during drilling but evidence of limited quantities of oil in the lowermost target horizon remained ambiguous in the subsequent down-hole well logs and pressure test data. The apparent lack of reservoir at this location did not justify further testing.
The second exploratory well had a primary stratigraphic target interval below 665m and a secondary target interval which is immediately above expected basement at a depth of 795m. The higher interval was targeted to encounter high quality fluvial sandstones, similar to those found in successful wells in Licence EA1, adjacent to EA5, but which were absent in the first exploration well.
The second well, which was spuded in February 2010, was plugged and abandoned after it was drilled to a total depth of 764m and did not encounter oil, despite persistent methane gas traces, and tested water from the target reservoir interval using a wireline fluid sampler. Electric logging confirmed the absence of oil and gas. Following recent discussions with Tower, Global chose not to take up its option to participate in the third well planned on EA5, and announced the non-exercise of this option the 6th of January 2012.
