Centric Energy Completes Agreements with Tullow Oil for Farm-Out of Kenya Block 10BA
28 September 2010 - 3:30PM
Marketwired
Centric Energy Corp. ("Centric Energy" or "the Company") (TSX
VENTURE: CTE) announces that the Company and Tullow Oil PLC
("Tullow") (LSE: TLW) have executed the definitive farm-in and
joint operating agreements whereby Tullow will farm-in to a 50 per
cent participating interest in Centric Energy's 100 per cent owned
Production Sharing Contract covering Block 10BA in north-western
Kenya (the "PSC"). The closing of the farm-in is conditional upon
the approval of the Kenyan Government and satisfaction of
conditions precedent which are expected to be completed within 30
days.
Pursuant to the agreements, Tullow will earn a 50 percent
participating interest in the PSC and will assume operatorship in
return for:
-- reimbursing 50 per cent of Centric Energy's acquisition costs for the
PSC which total approximately US$750,000;
-- paying 80 per cent of the first US$30 million of expenditures under the
PSC; and
-- assuming 80 per cent of the bank guarantees and parent company
guarantees during the period in which it is paying 80 per cent of the
expenditures under the PSC.
"Centric Energy is very pleased to have the opportunity to work
with Tullow Oil on the exploration of Block 10BA," said Alec
Robinson, President & CEO of Centric Energy. "Tullow's success
and expertise in a similar geological setting in Uganda will ensure
that Block 10BA is explored using the most modern exploration
technology and in accordance with recognized international
environmental standards and principles. Centric Energy intends to
participate fully with Tullow in the exploration program."
In addition to the approval of the Kenyan Government, another
condition precedent to the closing of the farm-in is the resolution
of a judicial review application filed against Kenyan Ministry of
Energy relating to certain exploration permits granted by the
Ministry, including the Company's PSC.
In the court proceedings, which were brought by Interstate
Petroleum Ltd. ("IPL") against the Permanent Secretary, Ministry
for Energy, IPL is seeking a judicial review of the administrative
process that led to the issuance of exploration permits in respect
of Block 10BA, among others, which resulted in Centric Energy being
a named party to the proceedings. A preliminary order, granting IPL
leave to seek orders against the Permanent Secretary, has been
granted and a hearing date has been set for October 27, 2010.
Centric Energy has been advised by its legal counsel in Kenya that
the courts in Kenya regularly grant this sort of preliminary order,
also known as "granting leave", in applications of this nature as
there is no requirement to establish the merit of the claim on the
initial application.
The Ministry of Energy has advised the Company that it can carry
on with its work program and that its PSC remains in good
standing.
Alec Robinson stated, "Centric Energy believes there is no basis
for the claims that IPL is making against the Permanent Secretary.
We understand that both the Permanent Secretary and the Ministry of
Energy share our view in that regard. Centric Energy will work
closely with the Permanent Secretary, the Ministry of Energy, the
Attorney General's office and other interested parties to ensure
that our interest in the Block is safeguarded."
Block 10BA is strategically located within the East African Rift
System which is enjoying increasing exploration interest and
significant recent success, most notably in the Albertine rift in
Uganda, 660 km to the west, which is considered to be the closest
geological analog to the Tertiary basins underlying Block 10BA
(source: Gustavson Associates, "Resource Evaluation Report, Centric
Energy Corporation, Kenya Block 10BA"). Major volumes of
hydrocarbons have been discovered by Tullow Oil in the Albertine
rift, currently estimated to be approximately 950 million barrels
recoverable as stated in the press release issued by Tullow on July
28, 2010
(http://www.tullowoil.com/index.asp?pageid=137&newsid=672).
ON BEHALF OF CENTRIC ENERGY CORP.
Alec Robinson, President and Chief Executive Officer
This News Release does not constitute an offer to sell or a
solicitation of an offer to sell any securities in the United
States. The securities have not been and will not be registered
under the United States Securities Act of 1933, as amended (the
"U.S. Securities Act") or any state securities laws and may not be
offered or sold within the United States or to a U.S. Person unless
registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is
available.
Forward-Looking Statements:
This press release includes "forward-looking statements"
including forecasts, estimates, expectations and objectives for the
completion of the farm-out to Tullow Oil PLC and exploration
activities that are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Company.
Statements regarding future exploration activities and capital
expenditures are subject to all of the risks and uncertainties
normally incident to the exploration for and development and
production of oil and gas. These risks include, but are not limited
to, Centric's ability to procure the funding necessary to pay for
its exploration costs, lack of availability of goods and services
to complete exploration work, environmental risks associated with
oil and gas exploration, regulatory changes and satisfaction of all
conditions precedent under the agreement with Tullow Oil. Investors
are cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ
materially from those projected in the forward-looking statements.
Such forward-looking information represents management's best
judgment based on information currently available. No
forward-looking statement can be guaranteed and actual future
results may vary materially. The Company does not assume the
obligation to update any forward-looking statement except as
required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider accepts responsibility for the adequacy or accuracy of
this release.
Contacts: Centric Energy Corp. Alec E. Robinson Toll Free: +1
(800) 962-7189 or: +44 207 222 8512 www.centricenergy.com
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