Milio International is expected to acquire 2D seismic onshore Block L6 after a defferement due to security concerns the Block Operator FAR Ltd has said.
The announcement made on the company’s annual report also estimates that following the interpretation of the data acquired the partners should proceed with drilling in early 2016.
Already the Government of Kenya has awarded the joint venture a one year extension to the current PSC period in order to complete the work program in a safe manner although the operator says working in the block remains a challenge at this time.
“Security issues have hampered the conduct of a seismic survey to be conducted by Milio which has been deferred until Q2 2015 with drilling now estimated to commence in early 2016. Working in Kenya remains a challenge at this time,” says FAR chairman Nic Limb.
Pursuant to the terms of the farm-out agreement by FAR in the block to Milio in February 2014, FAR is to be fully funded through the acquisition, processing and interpretation of an onshore 2D seismic survey and the drilling and testing of a high impact onshore exploration well in Block L6.
The drilling of the farm-out well will satisfy the work program and expenditure obligations for the current permit period of the Block L6 PSC. S
FAR adds that the farm-out parties are currently negotiating a farm-out amendment deed to reflect the above mentioned changed circumstances as the seismic program was due to commence in March 2015.
Last year FAR had planned to drill two wells one onshore and one offshore well in the last quarter of 2015 with a a farm out initiative for drilling an offshore well earlier expected to be complete by the end of October 2014.
Efforts to seek a partner for drilling in offshore Block L6 continue into 2015.
Following the completion of the farm-out agreement, FAR will remain the Operator on record of the entire PSC for Block L6. Pursuant to the terms of the farm-out agreement including Milio fulfilling the required farm-out activities, Milio will earn the rights and an associated 60% beneficial interest in relation to the onshore part of Block L6 only and FAR retains a 24% beneficial interest in the joint venture for the onshore part of Block L6.
FAR also preserves its 60% interest in the joint venture for the highly prospective offshore part of Block L6 which has an estimated 3.75 billion barrels of oil or 10.23 trillion cubic feet of gas) combined unrisked Prospective Resources*