| Lamu Basin - Offshore Kenya
Block L8 (15%) |
Joint Venture partners: Apache Corporation (50% and Operator), Origin Energy (25%), Tullow Oil plc (15%)
L8 covers 5,114.9 sq km offshore Kenya in the Lamu Basin in water depths from 100m to 1,300m immediately south of Pancontinental's L6 Block.
A number of new oil and gas discoveries have been made offshore elsewhere in East Africa, in geological circumstances that are contiguous to those in L8.
In 2005 Origin farmed-in to Pancontinental's interest and funded a 2D seismic program to earn 50% and subsequently funded a 3D seismic survey to earn a further 25%.
Apache Corporation, a large US major, farmed into Origin's interest in February 2011.
In March 2011 Pancontinental farmed out to Tullow Oil plc, one of Europe's most recently successful African explorers.
The 3D seismic data set acquired in 2009 has verified that the giant Mbawa structure is intact, and remains very large at a number of prospective levels. "Flat spots" or "DHI's" can be seen over the Prospect. Pancontinental's interpretation is consistent with a gas column of about 100m overlying an oil column of approximately 150m but these can only be validated by further seismic analysis and drilling.
There is an interpreted extensive deep oil and gas generating "kitchen" near the Mbawa Prospect, extending to the north into area L6. Sea surface "slicks" interpreted from satellite data support the concept of oil generation, expulsion and migration from the kitchen area and Mbawa itself. As well as Mbawa, other prospects in L8 also have high volumetric potential and are also associated with interpreted slicks.
The Mbawa Prospect has world-class potential for oil and gas, with volumetric potential easily exceeding one billion barrels of oil.
Tullow is earning a 10% interest in the L8 Production Sharing Contract form Pancontinental by paying US$ 1 million to Pancontinental for reimbursement of past costs and also by funding the future work programme on its own behalf and up to an agreed expenditure "cap" of US$ 9 million attributable to Pancontinental's retained 15% interest.
Pancontinental will initially retain a 15% interest in L8, from which Tullow will then have an option to earn a further 5% by funding Pancontinental's share of any second well to a "cap" of US$ 6 million.
Based on current budgets, the initial expenditures by Tullow will see Pancontinental "free carried" through a substantial part of the Mbawa drilling.
Initial planning has been undertaken for Mbawa drilling. Pancontinental estimates a mid-2012 spud date for drilling, operated by Apache, but the actual date will be known when a number of factors have been clarified, including the timing of rig availability.
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