The latest move involves the farm-in to Blocks L6, L8 and L9 with Woodside acquiring a 50% interest and operating rights. Afrex Limited will have a 30% interest and ASX-listed minnow Pancontinental Oil & Gas will have 20%.
Afrex is a UK-based firm, strongly associated with PanCon, and is hoping to list on the AIM exchange in the next 12 months.
Preliminary mapping of the larger prospects in the new blocks by the venture partners has indicated potential recoverable reserves exceeding a billion barrels of oil or several trillion cubic feet of gas.
Further technical work, including the acquisition of infill seismic data and the drilling of exploration wells is needed to confirm or refute the interpreted prospectivity of the area.
The Woodside deal potentially provides the existing joint venturers a free carry for the cost of this work.
The Pancon/Afrex areas amount to about one third of the entire offshore areas of Kenya under petroleum licences, half of which is in water depths less than 500 m with the deepest water reaching around 1,500m
Woodside will earn its stake by carrying the cost of 2,000km of two-dimensional seismic in the initial phase of the exploration program, estimated at $US1.25 million, taking Woodside's total Kenyan investment to about $US4.25 million.
If exercised, a second phase of drilling up to six wells is planned, at an estimated cost of between UA$15-20 million each
The farm-in follows Woodside's entry in May 2003 to four other Kenyan blocks - L5, L7, L10 and L11 - in a transaction with Dana Petroleum (E&P) and Star Petroleum International, which left Woodside with a 40% interest and operating rights in these blocks.
Seismic acquisition across all seven blocks is under way and is to be completed before the end of 2003.
Woodside's director of new ventures, Agu Kantsler, said the latest farm-in provided Woodside with at a relatively low-cost entry to additional exploration targets in the under-explored region.
"The addition of the seismic survey in these blocks to our current seismic contract will provide economies of scale in operations and our technical evaluation which will benefit both of the Woodside joint ventures and Kenya," Dr Kantsler said.
