Pancontinental Oil & Gas has announced that the Kenyan government has granted it a 12-month extension to the current Initial Exploration Period of the L10B offshore license.
Pancontinental says it considers this to be extremely favourable because it gives the joint venture partners more time to assess the impact of the Sunbird-1 discovery in the adjacent L10A area (PCL 18.75%) and its implications for possible future drilling in L10B. Pancontinental also intends to use the extended Period to secure a farm-in agreement for any future L10B drilling.
“Following the current Period (as extended), the joint venture can then elect to move into the First Additional Exploration Period of the license,” reads a statement from the company.
L10B has a number of large prospects and leads identified using 3D seismic and these are being examined as potential exploration drilling targets.
Pancontinental also says it will increase its stake in L10B from 15 percent to 20 percent and has notified BG Group which operates the license, and the other joint venture joint venture participants.
Pancontinental has increased its stake in L10B by taking up its pro-rata share of the interest held by Premier Oil, which has elected to withdraw with the changes in interests subject to the approval of the Ministry of Energy and Petroleum of Kenya although such approval is not expected to be withheld.
Pancontinental will increase its stake prior to 15 June 2014, subject to Ministry Approval.
Pancontinental says it believes that the significant prospectivity of L10B and the opportunity to increase its interest with other partners in L10B at no cost, as well as the prospectivity of adjacent area L10A, means it is well-placed to farm-out a portion of its interest in both licenses on attractive terms and in a suitable time-frame under the 12-month extension.
Meanwhile the operator of Block L10A BG Group has said analysis of the Sunbird-1 discovery results is ongoing following the intersection of a hydrocarbon-bearing zone in the top of the Sunbird Miocene Pinnacle Reef in April.
The results will be announced when a complete and integrated analysis has been made available to the joint venture by the operator.
Pancontinental has an 18.75 percent interest in the well and Block L10A.