PETROLEUM EXPLORATION AND

POSSIBLE PRODUCTION

OPPORTUNITIES FOR THE LICENSE

0058 COVERING BLOCK 2113A WALVIS

AND HUAB BASINS, NAMIBIA, SOUTH

ATLANTIC MARGINS

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1. NABIRM CORPORATE PROFILE

2. NAMIBIA AT GLANCE

3. FISCAL TERMS AND FINANCIAL MATTERS

4. KEY LEGISLATIONS

5. LOCATION OF THE LICENSE 0058

6. PETROLEUM SYSTEMS OF THE WALVIS BASIN

7. PETROLEUM SYSTEM OF THE HUAB BASIN

8. EXPLORATION STRATEGY AND COMMITMENTS

9. CONCLUSIONS AND OPPORTUNITIES

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NABIRM was awarded the Petroleum Exploration License

No. 0058 covering Block 2113A following the signing of the

Petroleum Agreement with the Namibian Government on

May 8, 2012. The License is 90% held by NABIRM Energy

Services (PTY) LTD a Namibian registered company with a

focused interest energy sector including petroleum

Resources development.

A wholly owned subsidiary of Nabirm Global LLC, is

focused on oil prospecting, exploration, and petroleum.

NABIRM Global, LLC is a U.S.-based mining and energy

services company focused on maximizing the value of its

global assets portfolio.

Nabirm Global LLC, the parent company of Nabirm Energy

Services (Pty) Ltd is an affiliate and subsidiary company of

the Masada Resource Group (MRG)

http://www.masada.com/overview/http://www.masada.com/overview/http://www.masada.com/overview/

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The overall strategic exploration model for the proposed

hydrocarbon search in Block 2113A target the following:

Basin margins associated with the Walvis and Huab

Basins;

Structural features associated with the regional geological

setting of the basins margins with potential structural trap

/ reservoirs;

Onshore and offshore basin margins geological sediments

as potential sources and reservoirs rocks.

The overall exploration strategy will focus on the Walvis and

Huab Basin evaluations and active petroleum systems

through the evaluation of existing historical data sets and

acquisition of 2D / 3D seismic data on key selected site-

specific targets leading to drilling and petroleum discovery.

Situated on Africa’s south-western seaboard

Stable Democracy with population of 2.1 million people (2011)

Modern legislative framework with good tenure security

One of the lowest political risk jurisdictions in Africa

Capital city is Windhoek

BBB Country Risk Profile (The Economist, 2010)

GDP of 14.64 billion USD (2010)

Per Capita $6,900.

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Democratic Government Since 1990;

Stable, peaceful and civil society;

Excellent infrastructure and services;

Rule of Law with amenable Petroleum legislation and

systematic Environmental Approach;

Repatriation of Profits;

Highly Prospective Petroleum Basins;

Favourable Namibia Dollar exchange rate.

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There are three principal components in the fiscal package:

Royalty which is levied at the rate of 5% of the market value

of oil and gas produced and saved. (Under earlier Rounds

the rate was 12.5%). In special circumstances, the Minister

may defer, remit or refund Royalty due, upon application

made by the holder of a production licence;

Petroleum Income Tax (PIT) PIT is levied at the rate of

35% of taxable income. (Until 1998, the rate was 42%),

and;

Additional Profits Tax (APT) will only be paid if the

petroleum operations in a Licence Area earn an after-tax

real (i.e. inflation- adjusted) rate of return of 15%. The

second and third tiers of APT become payable once the

profitability level exceeds 20% and 25% respectively.

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The Fiscal Terms are supplemented by the provisions of the

Model Petroleum Agreement, 1998, these three fiscal

elements are framed in modern legislation, which has been

specially formulated for the international oil industry and the

following must also be noted:

1. There are no signature, discovery or production

bonuses;

2. There is import duty free tax on items needed for

petroleum operations (e.g. fuel being an example of

an exception);

3. Oil companies are exempt from the Non-Resident

Shareholders' Tax; and

4. Although desired, there is generally no mandatory

requirement for State (NAMCOR) participation.

http://www.mme.gov.na/pdf/model_petroleum_agreement_1998.pdfhttp://www.mme.gov.na/pdf/model_petroleum_agreement_1998.pdfhttp://www.mme.gov.na/pdf/model_petroleum_agreement_1998.pdfhttp://www.mme.gov.na/pdf/model_petroleum_agreement_1998.pdfhttp://www.mme.gov.na/pdf/model_petroleum_agreement_1998.pdfhttp://www.mme.gov.na/pdf/model_petroleum_agreement_1998.pdfhttp://www.mme.gov.na/pdf/model_petroleum_agreement_1998.pdfhttp://www.mme.gov.na/pdf/model_petroleum_agreement_1998.pdfhttp://www.mme.gov.na/pdf/model_petroleum_agreement_1998.pdf

Inline with standard international practice, license application

fees, annual license area rental charges and annual training

sums are payable in addition to the main fiscal impositions.

Annual License area rental charges (which are deductible in

the computation of PIT and APT, and are not indexed to

inflation) are as follows:

N$60 (approx. US$7) per sq. km. of exploration area held

during the first 4 years (and any discretionary extension

period);

N$90 (approx. US$10.6) per sq. km. of exploration area

held during the next 2 years (and any discretionary

extension period);

N$120 (approx. US$14) per sq. km. of exploration area

held during the subsequent 2 years (and any discretionary

extension period);

N$150 (approx. US$17.7) per sq. km. of exploration area

held during any third renewal period;

N$1,500 (approx. US$177) per sq. km. of production area

held.

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Petrofund: Licensees must commit to spend a (biddable

and negotiable) minimum annual amount specifically on the

training of Namibians in petroleum and petroleum-related

matters.

Decommissioning Trust Fund: As a result of the

Petroleum Laws Amendment Act, 1998, licensees will be

required (as from the date when half of the estimated

petroleum reserves have been produced) to make annual

contributions into decommissioning trust funds. These

annual contributions will be deductible in the computation of

taxable income for both PIT and APT. OT

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The Petroleum (Exploration and Production) Act, 1991 -

which sets out the Royalty (as well as the level of

application fees and annual area rental charges).

The Petroleum (Taxation) Act, 1991 - which sets out the

PIT and APT.

Petroleum (Exploration and Production) Amendment Act

1993 (Act 2 of 1993): to amend the Petroleum

(Exploration and Production) Act, 1991, so as to provide

for training programmes and contributions to the

Petroleum Training and Education Fund;

The Petroleum Laws Amendment Act, 1998 - which

introduces a number of specific new incentives for Third

Round licensees.

Petroleum Act 1991: Regulations - relating to the health,

safety and welfare of persons employed, and protection

of other persons, property, the environment and natural

resources.

http://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991.pdfhttp://www.mme.gov.na/pdf/Petroleum_Taxation_Act_1991.pdfhttp://www.mme.gov.na/pdf/Petroleum_Taxation_Act_1991.pdfhttp://www.mme.gov.na/pdf/Petroleum_Taxation_Act_1991.pdfhttp://www.mme.gov.na/pdf/Petroleum_Taxation_Act_1991.pdfhttp://www.mme.gov.na/pdf/Petroleum_Taxation_Act_1991.pdfhttp://www.mme.gov.na/pdf/Petroleum_Taxation_Act_1991.pdfhttp://www.mme.gov.na/pdf/Petroleum_Taxation_Act_1991.pdfhttp://www.mme.gov.na/pdf/Petroleum_Taxation_Act_1991.pdfhttp://www.mme.gov.na/pdf/Petroleum_Taxation_Act_1991.pdfhttp://www.mme.gov.na/pdf/Petroleum_Taxation_Act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_amendment_act_1993.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_laws_amendment_act_1991.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991_regulations.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991_regulations.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991_regulations.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991_regulations.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991_regulations.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991_regulations.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991_regulations.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991_regulations.pdfhttp://www.mme.gov.na/pdf/petroleum_act_1991_regulations.pdf

Environment:

Environmental Management Act (2007)

Water Resources Management Act, 2004

Other laws, regulations and policies.

Investments Legislation:

Foreign Investment Act, 1990 (Act No. 27 of 1990);

Competition Act, 2003 (Act No. 2 of 2003);

Anti-Corruption Act, 2003 (Act No. 8 of 2003);

Affirmative Action Act, 1998 (Act No. 29 of 1998).

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OFFSHORE TARGETS (WALVIS BASIN)

Basal Tertiary Clastics and Turbidites, upper Cretaceous

Clastics and Turbidites and lower Cretaceous Carbonates

ONSHORE TARGETS (HUAB BASIN)

Structurally controlled hydrocarbon trap mechanism linked

to Basin margin setup;

Karoo sediments sequence within Verbrande Berg

formation and tight shale for Coal Bed Methane

Opportunities.

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Modified from Davison, 2005 Source: Schmidt, 2004

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Very good

correlation

between the

hydrocarbons

on both sides of

the margins.

Modern

geochemical

analysis to

Kunene-1

exploration well

has evidenced

the presence of

oils with similar

fingerprints

(geochemistry)

to those

present in

Campos basin

offshore Brazil. Source: Schiefelbein et al., 1999

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Source: Ministry of Mines and Energy,

2012

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The Huab Basin, covering the onshore portion of the

License 0058 (Block 2113A), in NW Namibia and formed a

connected basin with the Paraná throughout Karoo times

(late Palaeozoic) into the Lower Cretaceous

Martin (1961, 1975) proposes that the Huab Basin provides

clear evidence of a larger, lacustrine Karoo basin in the

west.

According to Hegenberger, (1992), the Huab Basin was an

eastward-projecting bay of the Paraná Basin of Brazil

during Gondwana times.

The Ecca Group sediments fill a glacially incised Aba-Huab

valley in the east, which then spreads out into the broad

Huab Basin further west.

As the basin deepened gradually westwards a marked

facies change occurred from deposits in shallow-water

conditions.

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System Group Formation

Early

Cretaceous

Etendeka Group Etendeka lava field

Twyfelfontein Formation

Jurassic

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West East

Triassic Krone

Upper

Permian

Ecca Group

Gai-as

Lower

Permian

Rino Wash Gudaus

Probeer

Tsarabis

Verbrande Berg

Carboniferous Dwyka

Group Not sub-divided

Source: Horsthemke et al., 1990

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Source: Horsthemke et al., 1990

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Initial Exploration Period 2012 – 2016

Desktop studies including geological, geochemical and geophysical.

Minimum exploration expenditure US$ 6 million

First Renewal Exploration Period 2016 – 2020

In the first renewal period the minimum exploration work Nabirm will

undertake includes shooting a 1000 sq.km (3D) seismic survey and

150 sample points for geo chemical analysis and the drilling of an

exploration well. The 3D survey area will be determined by the

results of the 2D survey. Minimum exploration expenditure US$ 45

million

Second Renewal Exploration Period 2020 – 2024

Carry out extensive 3D data acquisition and we will shoot 250 sqkm

of three-dimensional (3D) seismic, 75 sample points for geo chemical

analysis and the drilling of exploration or appraisal well if necessary.

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Overall, Namibia's offshore

and onshore areas inclusive

of the License 0058 covering

Block 2113A holds great

exploration opportunities that

can lead to a successfully

and rewarding petroleum

discovery. Good quality

sandstone reservoirs are

likely to be distributed

widely, and a number of

prospective structural and

stratigraphic traps have

been identified from

historical seismic survey and

some have been confirmed

from historical and ongoing

drilling operations.

OVERVIEW

Published analogue studies of basin-floor fan complexes in the

North Sea, USA and the Campos Basin of Brazil confirm their

commonly high porosities (20% +) and significant thicknesses

(200 m +) in addition to high recovery factors.

Similar reservoir parameters are anticipated in the offshore

potential prospects to be delineated in the License 0058 covering

Block 2113A. According to the modern available existing

geochemical data (results of geochemical analysis of condensate

samples from Kudu field, and oil extracts from several Offshore

Namibian wells, offshore Namibia holds at least two active

petroleum system and these are:

Barremian- Aptian petroleum system characterized by a highly

cracked, very mature condensate hydrocarbons sourced by a

lacustrine saline, alkaline calcareous black shale source rock

system deposited in a lacustrine brackish to saline anoxic

depositional environment. This source rock system is also present

in the Campos and Santos Basins in Brazil and Congo and

Cuanza Basins, in Angola. In Brazil and Angola such system is

overcharged and represents more than 50 billion bbl of

hydrocarbon reserves

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Albian- Cenomanian petroleum system characterized by black oils,

in the early/oil window stage, sourced by Albian-Cenomanian,

marine calcareous mudstone source rock system, deposited in an

anoxic depositional environment. Such system is identical to the

Albian source rock system present in the Campos, Santos, Cuanza

and Congo Basins in offshore Brazil and Angola, respectively.

Recent estimates suggest offshore Namibia contains about 166

billion barrels of original oil in place (OOIP). The mean prospective

resources are of about 42.6 billion barrels of oil and 128.8 Tcf (3.6 T

cubic meters) of gas prospective resources. This result could locate

offshore Namibia as one of the larger oil and gas resources

container in West Africa coast.

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The Huab Basin is a thermal sag basin and encompasses nearly

16000 km2 within its onshore portion and covered by the License

0058. It is believed to have formed during the release of heat after

rifting in eastern Africa from the Late Palaeozoic to Early Mesozoic

period. Numerous NW-SE and N-S trending faults traversing the

License 0058 areas and they have the potential to act as hydrocarbon

traps and/or conduits, and to promote fracture permeability. They are

among the key basin margin structural features that are key to

unlocking the hydrocarbon potential of the Walvis Basin and indeed

that of the License 0058 covering Block 2113A. The Huab Basin

presents the hydrocarbon exploration opportunities:

Basin margins associated with the Huab Basin and its potential

continuity and linkage with the Walvis Basin Offshore, and;

Onshore structural features associated with the regional

geological setting of the basins margins with potential structural

trap / reservoirs as well as the millions of years accumulated

geological sediments as potential sources and reservoirs rocks.

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NABIRM Energy Services (PTY) Ltd

P. O. Box 5315

Erastus Shapumba Towers

3rd Floor Unit No. 3002

Ausspanplatz

WINDHOEK NAMIBIA

Tel: +264 (61) 229187

Fax:+264 (61) 253521