GGE - new discovery confirmed offshore in Namibia

Last week we wrote about a rumoured discovery offshore in Namibia on a permit owned by a consortium of companies including BP.

Over the weekend, the operator of the project (Rhino Resources) put out the results from that well which confirmed a discovery with flow rates of ~11,000 barrels of oil per day.

(Source)

11,000 barrels of oil per day is a seriously good result and we think its really good news for any other junior explorers looking to drill wells offshore in Namibia.

We are Invested in Grand Gulf Energy (ASX: GGE) which has just picked up an option to acquire a project offshore in Namibia

GGE’s project is currently in the application stage which means the next major milestone for the project is to see the permit get granted.

GGE’s project is in the Walvis Basin which is to the north of the Orange Basin in Namibia.

The Orange Basin is where the mega discoveries have been made AND where that news over the weekend came from.

We think new discoveries across any part of offshore Namibia is a net positive for GGE because it means the region becomes even larger from a development opportunity perspective.

It also means more capital and expertise will flock to this part of the world at some point, increasing the look through valuation of any projects in the region.

We noticed there was a lot of buying in GGE’s offshore Namibian peer Pancontinental Energy which is currently trading up ~33% on some decent volumes…

Clearly the market likes the news over the weekend and is looking for small cap exposure to the region…

Here is where GGE’s application sits relative to the mega discoveries and yesterday’s news:

We did a deep dive on GGE’s new deal in our latest note, where we covered:

• Why we think Namibia is on track to become a top 10 oil producer…
• Why we like GGE’s new technical advisors and how they are proven oil finders
• Why we like high-risk, high-reward exploration
• History of GGE’s (pending) block
• Why Namibia is the place to be right now
• Will Namibia be the next “Guyana” for oil?
• What we want to see next for GGE

Check out the full note here: Tiny GGE secures option over 1BN barrels of oil (gross mean prospective resource)