Signed, sealed and delivered: Q&A with CEO N. Desmond Smith on Pennine's path forward into Albania (Part 1 of 2)
Feb. 21, 2017
With signatures, handshakes and government seals, Pennine Petroleum Corporation officially began preparing last week for its arrival on the Albanian energy landscape.
On Feb. 14, in the Albanian capital of Tirana, Pennine chairman Richard Wadsworth, CEO N. Desmond Smith and director Jeff Saxinger signed off on a finalized Production Sharing Agreement (PSA) with Albpetrol Sh.A. for the exploration and development of Albania’s Velca Block.
Pennine’s leadership has been eagerly awaiting finalization of this PSA, following the announcement back in December 2015 that the Calgary-based company had emerged as the successful bidder for the Velca Block, located 10 kilometers southeast of the city of Vlore in southern Albania.
What does this now mean for Pennine shareholders? In Part 1 of our Signed, Sealed and Delivered Q&A series, Mr. Smith sheds some light on Pennine’s path forward—in a country rich with natural resource promise.
Q: Now that the PSA has been signed off for the Velca Block, how long until Pennine starts drilling? What needs to happen first?
A: With the Albanian Ministry of Energy and Industry having placed the Velca Block license in the hands of Albpetrol, and Pennine having signed a PSA to develop the license, the work of gathering and detailing all the geological and geophysical information available is underway. This will determine whether additional data is required, and a decision can be made to drill. Our intention is to develop a technical report within 60 days to identify potential drilling targets within the Velca Block.
Q: Is there already pre-existing seismic data that tells you where the best drilling sites would be?
A: It’s fair to repeat that the geologists and engineers with Albpetrol, the Republic of Albania’s state-owned energy firm, are very excited about the prospects for this Block. Albpetrol had previously planned to drill an identified structure, but without the state budget and final support at the time, they shelved the project and sought an international partner (which has emerged as Pennine). We anticipate holding a working session with Albpetrol soon to review those plans. With this new information, Pennine will be updating and reprocessing the data to confirm these previous recommendations.
Q: The Patos-Marinza region is considered the largest onshore oil field in Europe. What about the Velca Block? What sort of track record does it have for oil exploration and production?
A: There is already a 1980s-era oil field owned by a third party producing light crude from a horizon of 2,000-metre depth at the northern end of the Velca Block. Initial indications are that these stacked reservoirs will repeat themselves to depths of 3,200 metres, just like the Pincher Creek, Waterton and Jumping Pound reservoirs in the foothills of Alberta. We expect to encounter lighter crude oil, based on projected drilling depths.
(In Part 2 of our Signed, Sealed and Delivered Q&A series, Mr. Smith will discuss Pennine’s plans for local workforce engagement, community investment, and further exploration opportunities in Albania. Stay tuned!)