Pancontinental Oil & Gas and its wholly owned subsidiary Afrex Limited (together\u00a0\u201cPancontinental\u201d) has entered a farm-in\u00a0agreement for the onshore portion of Kenyan exploration area Block L6 in the Lamu<\/p>\n
Basin. Block L6 is partly onshore and partly offshore.<\/p>\n
Under the terms agreed with farminee Milio E&P Limited (\u201cMilio\u201d) and Milio\u00a0International the current joint venture parties including Pancontinental will be fully\u00a0funded through drilling and testing an onshore exploration well in Block L6 with an\u00a0expected spud date in early 2015.<\/p>\n
In addition, before the well, the current joint venture parties will be fully funded through\u00a0the acquisition, processing and interpretation of a regional 1,000km of 2D seismic\u00a0survey aimed to confirm at least three prospects as drilling targets. The seismic\u00a0programme is expected to commence in April 2014.<\/p>\n
In consideration of Milio funding that work, Milio will earn a sixty percent (60%) participating Interest in the onshore portion of Block L6. Milio will not earn any interest\u00a0in the offshore portion of Block L6. Milio will become the Operator of the onshore\u00a0portion and FAR will remain the Operator of the offshore portion of the Block.<\/p>\n
Under the agreement Pancontinental will retain a 16% working interest in the onshore\u00a0part of Block L6.
\nThe farm-in is conditional on obtaining the appropriate Kenyan Government approval.<\/p>\n
The offshore L6 participants (Pancontinental and Flow Energy Pty Ltd, a subsidiary of\u00a0FAR (\u201cFAR\u201d)) are currently seeking a farminee to drill an offshore well in addition to\u00a0the onshore well to be drilled by Milio. Pancontinental retains its current 40% interest\u00a0in the offshore part of Block L6.<\/p>\n
Block L6 is well situated in relation to Kenyan coastal communities and infrastructure.\u00a0An onshore oil or gas development has the potential to contribute significantly to\u00a0Kenya\u2019s growing near-term energy needs. A gas discovery could supply gas to a\u00a0major power generation project that is currently under consideration by the Kenyan\u00a0Government.<\/p>\n
Two of the main Prospects covered by 3D seismic offshore L6 are the Kifaru and\u00a0Kifaru West Miocene Reef prospects, which share similar characteristics to the\u00a0Sunbird Prospect currently being drilled by Pancontinental and its joint venture\u00a0partners in offshore Kenya area L10A.<\/p>\n
\u201c We are very pleased to have secured our new partner Milio for seismic and drilling onshore L6.Pancontinental retains a healthy 16% free-carried interest onshore and additionally has the benefit of retaining its 40% interest offshore where we are also seeking a farminee for drilling,”\u00a0Barry Rushworth, CEO and Director of Pancontinental commented.<\/p>\n
“This new farm-in deal secures funding for evaluating the significant potential of the onshore part of Block L6 and to help unlock the potential of the wider Lamu basin in which Pancontinental has a very large acreage position of some 20,000 square kilometres gross.The offshore area already has several Prospects covered by 3D seismic and ready for drilling including the large Kifaru and Kifaru West Miocene Reef Prospects. A number of other reefs have also been tentatively identified on 2D seismic\u201d. He added.<\/p>\n","protected":false},"excerpt":{"rendered":"