Pancontinental Oil & Gas and its L10A joint venture partner PTTEP of Thailand have issued Operator BG Kenya L10A Limited notices of withdrawal from Block L10A in the Lamu Basin offshore Kenya.
This is subject to Ministerial consent where Pancontinental’s 18.75% interest and PTTEP’s 31.25% interest will be transferred to the Operator BG who will then be the only remaining participant and hold 100% of the L10A licence.
According to Pancontinental CEO and Executive Director Barry Rushworth the Company is committed to the prudent deployment of its resources and as such it has decided to withdraw from the L10A project, given the project’s cost and potential benefit profile with respect to the Company.
Block L10A will go down in Kenya’s history as the only offshore block in the region to see an oil discovery at the Sunbird-1 well despite decades of exploration.
According to Pancontinental that confirmed the gross oil column in the well was assessed to be 14m thick beneath a gross gas column of 29.6m in a reefal limestone reservoir in the Sunbird Miocene Pinnacle Reef in area L10A.
Pancontinental says it will advance and look to grow its African portfolio in the near term, consistent with its continued belief in the high prospectivity of parts of the continent and their future high potential to produce commercial oil and gas.
While withdrawing from block L10B Rushworth cited that the move had been guided by the interest of prudent financial management
“The Company considers that the withdrawal is in the interest of prudent financial management, whilst maintaining a manageable and prospective exploration portfolio,” said Rushworth.
Pancontinental remains in a unique position, with its remaining asset portfolio in Namibia (EL0037 with Tullow Oil) and Kenya (Block L6 with FAR Limited, Milio International) fully funded for the next phase of exploration commitments.
Prior to the withdrawal by Pancontinental Oil and Gas withdrawal the block has also witnessed the exit of Premier Oil in 2013.