This article is 19 years old. Images might not display.
Much like Hardman brought Woodside into Mauritania, Pancontinental has long been looking for a major energy player to farm into its Kenyan prospects.
“These prospects, based on current mapping and representative reservoir parameters using industry analogues, are estimated to have world class size speculative oil and gas reserves potential,” Pancontinental CEO Andrew Svalbe said today.
“Pancontinental is very pleased to have negotiated an agreement with a company having the technical, financial resources and the operational capabilities of Origin.”
Under the agreement Origin can earn 50% in each block by conducting a US$4 million detail 2D seismic program in these two blocks and earn an additional 25% in a given block by drilling an exploration well and meeting all drilling and testing costs of that exploration well.
Pancontinental will retain 25% after a free carry through the seismic, drilling, production testing and all other permit costs in each drilled block.
“The acquisition of the new 2D seismic data will commence in early 2006 on ratification of the agreement by the Kenyan Government, the contracting of a seismic vessel and suitable weather conditions,” Svalbe said.
“The US$4 million seismic survey will determine the viability of a number of very large prospects delineated by the 2003 and earlier seismic surveys.”
The Agreement requires Origin, on or before May 23, 2007, following interpretation of the 2D seismic survey, to advise Pancontinental of its election or otherwise to commit to drill a prospect in one or both of the blocks. The drilling of one or more exploration wells is required prior to September 2009.
This year, Pancontinental also completed a farm-out agreement with Anadarko Petroleum for its Maltese prospects.
The Anadarko and Origin farm-outs could result in Pancontinental being free-carried through expenditures of an estimated A$100 million over the next few years if the farminees exercise their options with the drilling of two wells by Anadarko in Malta, and two wells by Origin in Kenya, plus all preceding seismic and other permit costs.
