(~ 4,200 square kilometres – under application)
Cranemere is located in the Eastern Cape Province, north of the port city of Port Elizabeth. Geologically, it is in the deep part of the southern Karoo Basin and just north of the Cape Fold Belt.
Figure 2 Cranemere project – gas flare 1968
The Karoo Basin, which extends across 600,000 km2 is located in central and southern South Africa and contains organic rich shales of Permian age with combined thickness up to 5,000 feet. The focus for shale gas exploration is in the southern portion of the basin where the shales are at sufficient depth and where five wells, all pre-1970, intersected the shales with significant gas shows. One well, the Cranemere CR 1/68 well, flowed more than 8 MMcf/day of natural gas from the Fort Brown shale during testing over a 158 feet interval in 1968. The production was judged to be from fractures and secondary porosity in the shales. As first mover, Challenger’s South African subsidiary, Bundu Gas and Oil Exploration (Pty) Ltd (Bundu), selected its application area of approximately 1 million acres to be centred around this well.
The US Energy Information Administration (EIA) updated its 2011 report on World Shale Gas Resources in June 2013. The EIA estimates that the Lower Permian Ecca Group shales in the Karoo Basin contain 1,559 Tcf of risked shale gas in-place, with 390 Tcf as the risked, technically recoverable shale gas resource.
To demonstrate the scale of the estimated resource, according to the US Department of Energy, 1 Tcf of natural gas is enough to heat 15 million homes for one year, generate 100 billion kilowatt hours of electricity, or fuel 12 million natural gas-fired vehicles for one year. Significantly, the current EIA estimate excludes the thicker Upper Ecca shales on the basis that they have a lower reported total organic carbon content. These Upper Ecca shales include the Fort Brown shale, from which gas flowed at the Cranemere CR 1/68 well.
The Karoo Basin has become the focus of intense interest in the past few years, following the initial application to explore for shale gas in the basin by Bundu (acquired by Challenger in April 2010) in February 2009. Furthermore, the low economic growth rates and power crisis in South Africa have strongly motivated the government to pursue potential shale gas resources as a catalyst to transform the economy.
Shell and Falcon Oil and Gas are also pursuing exploration rights in the region. Chevron has announced an Agreement with Falcon Oil and Gas Ltd to jointly co-operate on unconventional gas opportunities in the Karoo Basin, with the result that Challenger is the only junior company with interests in the basin, alongside Shell and Chevron.
Updated Environmental Management Programme Report in support of application for Petroleum Exploration Rights within the Magisterial Districts of Somerset East, Cradock, Pearston and Jansenville, Eastern Cape Province