Centric Energy has signed a Production Sharing Contact (PSC) with the government of the Republic of Kenya for Block 10BA located in the northern part of the Rift Valley province of Kenya, and covering part of the East African Rift system.
The PSC was officially signed in Nairobi on January 27, 2010, by Kiraitu Murungi, minister for Energy of the Republic of Kenya, and Alec Robinson, president and CEO of Centric Energy.
Mr Robinson said: “Block 10BA is a very exciting new exploration opportunity for Centric Energy. We look forward to working closely with the Kenyan authorities, using modern exploration technology to rigorously explore for hydrocarbons in the block.”
The PSC is split into a seven-year exploration term, with three periods, and a 25-year production term. In the first three-year exploration period, the company will re-process and study existing data and conduct geophysical and geological surveys including gravity and magnetic surveys, and will acquire new 2D seismic. The optional second and third periods are of two years each and include obligations for the acquisition of 2D and 3D seismic and the drilling of exploration wells.
Centric Energy’s Block 10BA is strategically located within the East African Rift system. Heritage Oil and Tullow Oil have discovered major volumes of hydrocarbons in the Albertine rift, currently estimated to be more than 1 billion barrels recoverable.
The company said that Block 10BA is relatively under-explored, with the most recent seismic data acquired in 1991. It covers 16,205sqkm (over 4,000,000 acres) 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.
The Loperot-1 well was drilled by Shell Exploration (Kenya) in 1992 in the southern part of the Lodwar basin, 75km to the south of Block 10BA, and encountered oil shows and mature source rocks, demonstrating the presence of a petroleum system.
In addition, further exploration opportunities and upside potential are provided by the Cretaceous-age Anza Graben, which underlies the northern part of Block 10BA. A deep exploratory well is currently being drilled by CNOOC (China National Offshore Oil Corporation) in the southern part of the Anza Graben to the southeast of Block 10BA.
An independent assessment of the prospective resources of Block 10BA has been completed by Gustavson & Associates under a Resources Evaluation report prepared in accordance with National Instrument 51-101 – Standards for Disclosure for Oil and Gas Activities.
This report calculates prospective resources for 25 prospects in the block. The company has acquired the rights to be granted the concession 10BA Production Sharing Contract from an arm’s length party introduced to the company and has agreed to pay, subject to receipt of final approval from the TSX Venture Exchange, a total of $615,000 in acquisition costs and finder’s fees.