The closing of the farm-in is conditional upon completion of due diligence, the negotiation and settlement of definitive farm-in and joint operating agreements and the approval of the Kenyan government and the TSX Venture Exchange.
Pursuant to the letter agreement, Tullow will assume operatorship in return for reimbursing 50% of Centric’s acquisition costs for the PSC, which total approximately $750,000; paying 80% of the first $30m of expenditures under the PSC; and assuming 80% of the bank guarantees and parent company guarantees during the period in which it is paying 80% of the expenditures under the PSC.
Block 10BA is 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, which is considered to be the closest geological analog to the Tertiary basins underlying Block 10BA. Major volumes of hydrocarbons have been discovered by Tullow Oil in the Albertine rift.
The block is relatively under-explored, with the most recent seismic data acquired in 1991. It covers 16,205sqkm in a part of the Rift System that includes portions of several Tertiary-age rift sub-basins, including the Kerio and Turkana basins and the northern part of the Lodwar basin.
