Namibian Licenses

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Letho recently entered into a letter of intent to acquire certain Namibian Onshore Oil and Gas Licenses (the "Namibian Licenses") from Incan Energy Inc. ("Incan"). Incan currently owns a 75% interest in six Namibian Licenses located within the Owambo Basin and a 73% interest in one additional Namibian License located in the Waterberg Basin.

The Namibian Licenses are comprised of six onshore licenses located within the Owambo Basin of Namibia with a total area of nearly 37,000 km2, and one onshore license located in the Waterberg Basin with a total area of nearly 10,000 km2.

Namibia-Oil-Basins

Although the Owambo Basin is largely unexplored, the opportunity lies therein that large concession acreage is available for exploration and that there is an active petroleum system present. Historically, oil was discovered in the Etosha well 5-1A (Block 1814), and other the hydrocarbon indicators present and verified in the basin.

The Waterberg Basin is unexplored, but has live gas shows in several shallow boreholes. The opportunity exist to further exploration and define this smaller type African Rift Basin in better geological terms, with potentially finding a deeper and larger gas target that could be exploited for the generation of electricity.

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Owambo Basin - History

  • Owambo Basin: 5 Key Indicators exist that an active Petroleum System is present. (Source Rocks, Reservoir Rocks, Hydrocarbon traps & Seals.
  • Owambo Basin: Numerous oil seeps in south-western part of the basin + flammable gas from local water wells.
  • Owambo Basin: A fair amount of historical data is available; 2900 km’s of vintage 2D Seismic data (1967-1991), Stratigraphic Well Logs, Aerial Magnetic & Gravity Survey’s, Geochemical Survey’s, Reports etc.
  • Owambo Basin: Deepest Well; Well 5-1A, 2509m TD, 1969 drilled with good live light crude oil shows, 29 API.
  • Owambo Basin: Dr. Gerhard Greiner confirmed that low risk prospects exists; either gas or oil.
  • Owambo Basin: Best area to explore = was identified as the North-western part of the Owambo Basin.

Petroleum System Overview

Source Rock

  • Marine Shales present throughout basin in adequate thickness and TOC
  • Hydrocarbon Indicators from surface geochemical sampling and cuttings.
  • Well 5-1A Recovered 29° API oil from shut-in wellbore
  • Hydrocarbon Indicators in outcrop fluid inclusions
  • Flammable gas from local water wells
  • Numerous oil seeps in southern flank of the Basin

Vitrinite Reflectance 0.73 – 1.08 in the Mulden Group illustrates black shales are in the oil window

Reservoir Rocks

  • Enhanced porosity of fractured and dolomitized Otavi Carbonates
  • Well 5-1A encountered carbonate matrix porosity between 8-15% and 20-25% in fracture zones.
  • Zones of lost circulation is several wells illustrate the sandstones of the Mulden Group have good porosity
  • Reefs and carbonate buildups illustrate good porosity development when dolomitized

Northern EPL Area

  • EPL Area 1& 2 ~ ,1,976,412 acres
  • Covering blocks inside the Owambo Basin
  • Cost estimate ~ N$ 1.1 million/Annum
  • Licenced period 4 year

 

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EPL - 928,766 acre

 

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EPL - 1,047,646 acres

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Gas Exploration Block - 2018

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INVESTMENT CLIMATE – NAMIBIA

GDP: US$12.3 billion
Annual Growth: 4.4%
Population: 2.2 million
Inflation: 5.5%
Country Risk Profile: BBB-

Major Industries: meatpacking; fish processing; dairy products; pasta; beverages; mining (diamonds, lead, zinc, tin, silver, tungsten, uranium, copper)

Major Trading Partners: South Africa, Angola, UK, China

Taxation of Oil Production: 5% state royalty, 35% corporation tax, no capital gains, IRR >15%, APT 25%

Existing Foreign Companies: The Maurel and Prom Company, Anglo American plc, AREVA Resources Namibia, DeBeers (Namdeb Diamond Corp), Glencore Xstrata plc, The Maurel and Prom Company, and Rio Tinto Alcan.

Political Situation:  An ethnically diverse republic, which gained political independence from South Africa in 1990, Namibia operates as a stable democracy with a population of approximately 2.2 million. The government has pursued free-market principles designed to promote commercial development, has good relations with its neighbours, and has actively encouraged international foreign investment.

Investment Climate: The 1990 Namibian Foreign Investment Act provides for freedom from nationalisation, freedom to remit capital and profits, currency convertibility and a process for settling disputes equitably.
Namibia's 2013 GDP was estimated at US$12.3 billion and its gross domestic real growth rate was 4.4%. Namibia has a country risk profile of BBB-.