Centric Energy Announces Kenya Government Approval of Block 10BA Farmout
04 November 2010 - 10:00PM
Marketwired
Centric Energy Corp. ("Centric Energy" or "the Company") (TSX
VENTURE: CTE) is pleased to announce that the Kenyan Government has
approved the farm-out of a 50 percent interest in Block 10BA to
Tullow Oil PLC ("Tullow") (LSE: TLW).
Block 10BA covers 16,205 square kilometres in the northwestern
part of Kenya, the size of approximately 65 UK North Sea
exploration blocks. It includes approximately 75 percent of Lake
Turkana. It is located in the eastern arm of the Tertiary-age East
African Rift system and is considered analogous(1) to the Albertine
rift in Uganda, where an estimated 1 billion barrels of reserves
have been proven to date, with another 1.5 billion barrels of
prospective resources(2). The Lake Albert blocks are operated by
Tullow Oil, and out of 36 exploration wells drilled, 35 have been
successful.
(1) Resources Evaluation Report by Gustavson Associates prepared
January 2010, to NI 51-101 standards.
(2) Tullow financial reports, August 25th 2010. Centric Energy
is not able to confirm whether or not this information was prepared
by a qualified reserves evaluator or auditor or in accordance with
the COGE Handbook.
Vintage 1984 seismic data on Lake Turkana demonstrate the
presence of several sub-basins and a very thick sedimentary section
of Tertiary age. Evidence of a working petroleum system is provided
by analysis of satellite-derived synthetic aperture radar data
which indicates slicks on the surface of the lake that may be
related to oil seeps. In addition an oil seep was located on the
northern shores of Lake Turkana by UK geologists during fieldwork
in the mid-1980s.
The Resources Evaluation Report for Block 10BA prepared by
Gustavson Associates in accordance with NI 51-101 and published on
January 1st, 2010, estimates P50 prospective resources of 2.2
billion barrels of oil (unrisked) in 27 prospects in Block 10BA.
The P90 and P10 numbers are 0.95 billion barrels and 4.4 billion
barrels respectively.
Prospective Resources are those quantities of petroleum
estimated to be potentially recoverable for undiscovered
accumulations by the application of future development projects.
There is no certainty that any portion of the resources will be
discovered. If discovered, there is no certainty that it will be
commercially viable to produce any portion of the resources.
The terms of the farm-out agreement are that Tullow will earn a
50 percent participating interest in the PSC and will assume
operatorship in return for:
-- Reimbursing 50 percent of Centric's acquisition costs for the PSC which
total approximately US$750,000.
-- Paying 80 percent of the first US$30 million of expenditures under the
PSC.
-- Assuming 80 percent of the bank guarantees and parent company guarantees
during the period in which it is paying 80 percent of the expenditures
under the PSC.
The Kenyan Government approval was one of the conditions
precedent for finalizing the farm-out to Tullow. The final
condition is the settlement of the judicial review application
filed against the Kenyan Ministry of Energy relating to six
exploration permits granted by the Ministry, including the
Company's PSC covering Block 10BA. As advised in our news release
dated October 28th, 2010, the next court hearing is scheduled for
November 16th, 2010. Meanwhile, the Kenyan Ministry of Energy has
advised the Company that it can carry on with its work program and
that its PSC remains in good standing.
"Centric Energy is very pleased to receive the Kenyan Government
approval of the farmout to Tullow Oil," said Alec Robinson,
President & CEO of Centric Energy. "Tullow's success and
expertise in the very similar geological setting of the Albertine
Rift in Uganda will ensure that Block 10BA is explored rigorously
and without delay, using the most modern exploration technology and
in accordance with recognized international environmental standards
and principles. Centric Energy looks forward to working closely
alongside Tullow on this outstanding exploration opportunity."
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.
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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