New Deepwater Exploration Licence in Kenya (2729D)
March 21 2011 - 2:00AM
UK Regulatory
TIDMDPL
RNS Number : 2729D
Dominion Petroleum Limited
21 March 2011
21 March 2011
DOMINION PETROLEUM LIMITED
("Dominion Petroleum" or "the Company")
AWARD OF NEW DEEPWATER EXPLORATION LICENCE IN KENYA
Dominion Petroleum is pleased to announce the award of Block L9
of the Lamu Basin, offshore Kenya. The Company last week concluded
negotiations with the Government of the Republic of Kenya by
executing heads of agreement ("HoA") which define the terms for
Block L9. The award of L9 is subject only to the signature of a
Production Sharing Contract ("PSC") by Dominion and Kenya's
Ministry of Energy; currently scheduled to take place next month in
Nairobi.
Block L9 represents one of the last, best new licensing
opportunities along the whole of the deepwater East African margin
and has many geological similarities to the company's Block 7
offshore Tanzania. Dominion will operate L9 with a 60% working
interest.
Due to the amount of interest expressed by potential partners in
Block 7 to date Dominion may now seek to include L9 in any
subsequent "farm-out" process and try to coordinate exploration
activities between the two blocks.
Block L9 has seen one well drilled in it previously, the Simba-1
well in 1979. The Simba well encountered gas shows in the tertiary
and upper Cretaceous. The Simba results suggest a working
hydrocarbon system in the Lamu basin and offshore oil seeps have
also been identified to the north of L9.
Following signature, the Initial Exploration Period of the PSC
will last for two years. During this time, a gross minimum work
commitment of $6.15m inclusive of the acquisition of 500 square
kilometres of 3D seismic data is required.
Following the initial period, there is an option to relinquish
the PSC or commit to another two year exploration period with the
obligation to drill one well in that period.
The terms and the commitments for L9 defined in the HoA compare
very favorably to other countries in the region relative to the
potential resource the block represents.
Andrew Cochran, Chief Executive of Dominion Petroleum,
commented:
"Kenya's Block L9 represents one of the very few 'ground floor'
opportunities remaining in the highly prospective, and increasingly
attractive, East African offshore basins. The PSC, when signed,
will represent a significant expansion of Dominion's deepwater
footprint, in an area that is rapidly gaining the attention of
major players in the industry.
"Through Dominion's expansion to offshore Kenya, with a large
operated working interest, we're keeping pace with the industry
along the East African margin amongst company's leading the charge
in the region. By using the knowledge and experience gained from
our operations offshore Tanzania we were able to quickly identify
and secure L9 in midst of what was a very competitive process."
"Dominion looks forward to working with Kenya and wishes to
thank the Government for the opportunity they've awarded us."
ENQUIRIES:
Dominion Petroleum Limited
Andrew Cochran, Chief Executive Officer +44 (0) 20 7349 5900
Rob Shepherd, Finance Director
Pelham Bell Pottinger Limited +44 (0)20 7861 3112 /
Archie Berens +44 (0)7802 442 486
RBC Capital Markets, NOMAD and Joint Broker +44 (0)20 7653 4000
Martin Eales
Paul Stricker
Canaccord Genuity Limited, Joint Broker +44 (0)20 7050 6500
Tarica Mpinga
This information is provided by RNS
The company news service from the London Stock Exchange
END
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