🕐29.10.10 - 01:54 Uhr
Centric Energy Advances Toward Drilling In Sub-Saharan Africa
Centric Energy Advances Toward Drilling In Sub-Saharan Africa
By Claire OConnor
www.ProspectingJournal.com
Thursday, 28 October 2010
Centric Energy Corp.
(TSX.V: CTE) (Centric) is an independent oil and gas
exploration company focused on hydrocarbon exploration and production
opportunities in sub-Saharan Africa.
With a combined gross acreage of over
88,000 square kilometres (net 26,100 sq km) in Kenya and Mali, Centric has
partnered with two significant sub-Saharan African exploration and production
players; namely Tullow Oil PLC (TLW: LN) (Tullow) in Kenya and Heritage Oil
Corp.(TSX: HOC, LSE: HOIL) (Heritage) in Mali.
Centric is now preparing to
embark upon an estimated US$65 million of exploration over the next two to
three years, largely carried by its partners under the terms of their farm-in
agreements.
KENYA
After concluding the farm-out of a 50 per cent interest to Tullow, Centric will
hold the remaining 50 per cent interest in Block 10BA, covering 16,205 square
kilometres in northwest Kenya.
For comparison, the oil-bearing Blocks 1 and 3A
in Uganda total only 5,700 sq km.
Block 10BA occupies a prime location in the
eastern arm of the East African Rift system, and includes the major part of
Lake Turkana.
Independent experts have identified 27 exploration leads with
P50 prospective oil resources totalling 2.2 billion barrels.
The analogous western arm of the rift system includes Lake Albert in Uganda,
where resources of about 1 billion barrels of oil have been proven by Tullow ,
with yet-to-find prospective resources of 1.5 billion barrels.
Tullow is
farming-in to a 50 per cent interest in Block 10BA.
Tullow is one of Europes largest independent oil and gas exploration and
development companies with over 85 licences in 22 countries producing net
55,800 boepd .
Through successful exploration and consistent delivery of major
projects, it is becoming Africas leading independent oil company.
Centric executed definitive farm-in and joint operating agreements with Tullow
on September 28th, 2010.
The closing of the farm-in is conditional upon the
approval of the Kenyan Government and satisfaction of certain other conditions
precedent which are expected to be completed by the end of November 2010.
The Tullow Agreement
According to the press release issued by Centric on September 28th 2010:
Pursuant to the agreements, Tullow will earn a 50 per cent participating
interest in the PSC and will assume operatorship in return for:
reimbursing 50 per cent of Centric Energys 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 and CEO of
Centric Energy.
"Tullows 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."
Kenya Work Program
The anticipated initial work program on Block 10BA includes 2-D seismic and
detailed full-tensor gravity surveys with exploration drilling possible as
early as the second half of 2011.
The program is designed to explore the area
thoroughly and quickly, using the latest technology and was a key part of
Tullows successful exploration program in Uganda.
After Government approval
of the farm-out, the exploration program will be operated by Tullow, employing
the expertise gained through their successful exploration of Lake Albert in
Uganda.
Kenya is the one that I think is going to move fastest, Robinson says of
Centrics two properties.
Its also possibly the one with the more exciting
image in the stock market and in the exploration community, simply because of
its proximity to the Albertine rift in Uganda with a very similar geological
setting, where Tullow and Heritage have discovered 950 million barrels of oil
with an upside potential of 1.5 billion barrels.
Block 10BA is the size of 65
North Sea blocks, and the old 1984 seismic data, which will be infilled with
new data as part of the exploration program, show several deep, undrilled
sedimentary basins.
Shortly after the government approval comes out well be
able to announce firm exploration plans to the market.
This is expected to
consist of a seismic program and a full-tensor gravity survey, at least
initially, and probably drilling by late 2011.
Its very exciting.
MALI
Although the companys focus is currently on the Kenyan property, Centrics
72,843 square kilometres in Mali is progressing nicely towards anticipated 2D
seismic work and the drilling of an exploration well 2011.
Centrics wholly-owned subsidiary, Mali Oil Development SARL, originally held a
100 per cent interest in both Blocks 7 and 11 in southeast Mali.
In 2008,
Centric farmed-out a 75 per cent interest to Heritage Oil Corp., retaining 25
per cent, and is now fully-carried through the obligatory seismic program and
first exploration well.
Heritage Oil is an independent, international oil and gas exploration,
development and production company with a focus on primarily frontier areas in
Africa, the Middle East and Russia.
The company has been highly-successful with
this strategy and, for example, in 1997 was first company to explore for oil in
Uganda after more than 60 years.
Heritage discovered the first oil there with
the Kingfisher 1 well in 2006/2007 .
Heritage recently sold its interests in
Uganda to Tullow, for US$1.45 billion.
Blocks 7 and 11 in Mali cover 72,843 square kilometers, the size of 290 North
Sea Blocks with only one exploration well, drilled in 1976.
Geologically they
are in the Central African Cretaceous rift system, and existing 1974-vintage
seismic data on the blocks show up to 15,000 feet of untested Cretaceous
sediments.
A nearby water well has well-documented oil shows.
Neighbouring
analogous rift basins include the Agadem block in Niger, with a reported 350 mm
barrels of oil in place in Cretaceous-age reservoirs .
Mali Work Program
Regarding its 2010 work program, Heritage as operator has budgeted for up to
876 kilometers of 2D seismic with firm plus contingent budgets of US$20
million, to be followed by seismic interpretation leading to possible
exploration drilling during 2011.
Centric Energy is fully-carried through this
seismic program and first exploration well.
CENTRIC MANAGEMENT
Centric regards its highly experienced management team as one of its strongest
assets with over 140 years of experience between them.
President and CEO Alec Robinson boasts over 40 years of international E&P
experience, mainly with Amoco Corporation (NYSE: AN) in overseas locations
across the world, including management of both exploration and production
operations at a senior level, and extensive experience working and negotiating
with host governments and state oil companies.
Chairman Darren Devine has over 20 years experience in international corporate
finance with a focus on early stage energy companies, while Vice President -
Exploration Chris Lewis adds another 20 years in international exploration and
management.
Vice President - Engineering Mike Harrison is a petroleum engineer with 30
years international industry experience and Paul Griggs, Head of Business
Development, has 30 years business development and capital markets experience
including positions with Sterling Energy and OMV.
Combine that with Chief
Financial Officer Andy Bells more than 25 years in the independent oil sector
and that makes a strong management team.
FUTURE OUTLOOK
Centric Energy is moving forward.
The successful strategy of managing its
financial exposures by farming-out to reduce cost while retaining significant
upside, has seen the companys share price increase 5-fold from $0.08 in March
2010 to over $0.415 at present.
With just over 92 million shares issued and
market capitalization of over $38 million, Centric remains ambitious and
focused on property advancement and expanding its sub-Saharan Africa portfolio
Follow the companys progress at www.centricenergy.com or contact the Investor
Team directly: Toll-Free: +1 800 962 7189, email
[1] Gustavson Associates, January 2010, Resources Evaluation Report, to NI
51-101 standards.
[2] Tullow Oil half-yearly results, 25 August, 2010
[3] Tullow website
[4] Heritage website
[5] Internal Petronas study, 2006
[6] Close of trading, 27 October, 2010
This message was sent by: Mining Investment News, Suite 1980 - 1075 Georgia W., Vancouver, BC V6E 3C9, Canada
Manage your subscription:
http://app.icontact.com/icp/mmail-mprofile.pl?r=68314836&l=41000&s=68OA&m=444588&c=645984