Name and Location
Ibhubesi gas project (IGP), off the Northern Cape coast, South Africa.

Client
Sunbird Energy has acquired a 76% interest in the production right for Block 2A, within which the Ibhubesi gas project is located, from Forest Oil and Anschutz Corporation.

The acquisition enables the ASX-listed company to operate and develop Ibhubesi with South Africa’s national oil company, PetroSA, which will hold the remaining 24%.

Project Description
The IGP is located 380 km north of Cape Town, in Block 2A, which is a production right that covers 5 000 km². The undeveloped gasfield – the largest in South Africa – has 1P reserves of 210-billion cubic feet (bcf) and 2P reserves of 540 bcf.

Value
The initial phase of the project could involve an investment of between R12-billion and R14-billion to produce 28.3 bcf/y of gas over an initial six- to eight-year horizon.

Duration
A final investment decision is expected in 2015, with first gas planned for 2017.

Latest Developments
Sunbird completed a $5-million capital raise with the Pan-African investment company Vandasia Investments in October 2014.

Vandasia's investment required several conditions precedent to be met by November 30, 2014.

The parties experienced delays in satisfying these conditions and, as such, Stage 2 of Vandasia's investment in Sunbird was not completed as announced.

Sunbird and Vandasia continue to work together with regard to Vandasia’s completing a further investment in Sunbird.

During the quarter ended December 2014, Sunbird advanced negotiations with Eskom for the sale of indigenous gas from the IGP to Eskom’s Ankerlig power station.

The parties have jointly developed a gas sales agreement (GSA) term sheet, which follows the signing of a memorandum of understanding (MoU) with the South African power supplier in December 2013 and the establishment of a working committee to progress an integrated project development plan, resolve technical interfaces and advance commercial terms.

Meanwhile, Sunbird has completed a final draft of the field development plan (FDP) and the basis of design (BoD) studies at Ibhubesi. The FDP and BoD studies define the final well designs, locations and scheduling, the engineering designs of the gas processing facilities and the optimal sales pipeline size and route.

Further, during the quarter the final scoping report (FSR) for the IGP development concept, namely the offshore production facility, pipeline and onshore gas processing facility, was prepared and issued for public comment. This consultation period ended in September and the FSR was submitted to the Department of Environmental Affairs and approved in November 2014.

In May 2014, Sunbird and PetroSA formally submitted a request to extend the permit for the gas market development phase, which was due to expire in mid-October. The application was processed by the Petroleum Agency of South Africa (PASA) and in July 2014, PASA confirmed that the application had been forwarded to the Department of Mineral Resources with a recommendation to accept the requested three-year extension. This application is awaiting Ministerial approval.

Sunbird’s engagement with PASA and the completion of several independent technical reports commissioned by Sunbird, PASA confirmed in December 2014 that Sunbird’s Block 2 A abandonment guarantee (a form of environmental bond) had been reduced to about $2.74-million.

Sunbird is in late-stage negotiations with several bond providers for the placement of this guarantee.

Key Contracts and Suppliers
MHA Petroleum Consultants (field development plan) and WGK (engineering and project management services).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Sunbird Energy, tel +61 8 9463 3260, fax +61 8 9462 6630 or info@sunbirdenergy.com.au.
PetroSA group communications manager Thabo Mabaso, tel +27 21 929 3365 or email thabo.mabaso@petrosa.co.za.
MHA Petroleum Consultants, tel + 303 277 0270 or fax +1 303 277 0267.
WGK director, corporate communications – eastern hemisphere, Carolyn Smith, tel +44 1224 851099 or email carolyn.smith@woodgroup.com.