Page 33 - Integrated Annual Report

Transkei and Algoa Blocks in 2020, Impact became the sole licensee. This presented an exciting opportunity to take control of exploration across the highly prospective Natal Trough. Impact expanded into the licence outboard of the Transkei and Algoa Blocks, by acquiring a 90% interest in the ~78,000km2 Area 2 licence. Jointly, the Transkei and Area 2 blocks capture the full extent of all the large, deep water marine reservoirs of the highly prospective Natal Trough, which Impact believes to have billion-barrel resource potential.
At the end of 2020, Impact was joined by Royal Dutch Shell (“Shell”) as operator of the Transkei and Algoa Blocks. Shell has agreed to acquire approximately 6 000sqkm of 3D seismic over the Transkei Block, commencing late 2021. These data will allow the joint venture to identify drill-worth prospects on the Block.
Namibia – Venus Exploration Well:
Impact’s giant Venus prospect, in ultra-deep-water Namibia, Block 2913B, is now scheduled to be drilled by Total Energies during 4Q21. The Venus prospect has been identified by key industry analysts as one of the top 20 wells to watch, worldwide, in 2021. This is an exciting and long-awaited event in the Impact calendar. We hope to provide an update on this exciting well in 2022.
The adjacent Block 2912, where Impact holds an 18.89% interest, could contain a sizeable extension of the Venus prospect and offers substantial upside potential in a Venus success case.
Agence de Gestion et de Coopération entre le Sénégal et la Guinée-Bissau (AGC), a common maritime zone between Guinea-Bissau and Senegal:
In the AGC, Impact continues to work with its partner CNOOC to progress the exploration of the block. The
KAROSHOEK SOLAR ONE PROPRIETARY LIMITED (RF)
The Karoshoek solar project achieved an important milestone this year it passed the Long Term Performance Test. The plant has bedded down well and produced at 97% of its capacity over the past year. The Operator continues to refine plant performance to achieve higher output.
The COVID-19 pandemic was well managed and has not impacted substantially on the operation. The company is steadily reducing its debt and has become a valuable asset. At the same time it makes a positive contribution to the generation of renewable energy and demonstrates the great potential of this sector.
joint venture has identified multiple exciting drill-worthy prospects but is awaiting both country’s Parliaments to ratify the AGC Treaty renewal, before firming-up drilling plans. Impact’s expectation is that at least one well will be drilled by CNOOC during 2H22 in the AGC area, if the Treaty is ratified in 2021.
Challenges:
Certainty of fiscal terms and the regulatory environment are crucial ingredients of investment in the oil and gas sector. These remain critical hurdles for Impact in both South Africa and the AGC. It is certainly positive news that a revised draft of the South African Upstream Petroleum Resources Development Bill was published in June 2021, and that progress has been made on a renewed AGC Treaty, but both items have some distance to travel before they are adopted into law. We continue to work with our industry partners and Governments on these issues, with the hope of unlocking significant value for Impact.
Industry Outlook:
The oil industry continues to be affected by the 2020 market crash, the effects of COVID-19 and the acceleration of the energy transition. However, oil prices have recovered substantially, with Brent oil currently trading between $70 and $75 per barrel.
Investment in exploration remains constrained, with the effects of 2020 and 2021 budget cuts by industry majors and super-majors continuing to affect exploration programmes. Whilst this underinvestment is likely to drive oil prices higher in the medium term, the hurdles to securing investment from the industry majors and super- majors remain extremely high as the sector focuses on producing assets over exploration.
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
INTEGRATED ANNUAL REPORT 2021 31