Wednesday, May 18, 2011
Dominion Petroleum Ltd.
Dominion Petroleum has signed the Production Sharing Contract (PSC) for Block L9 in the Lamu Basin, offshore Kenya, giving the Company a 60% working interest and operatorship. The Company previously announced the award of L9 on 21st March 2011 and the PSC was signed yesterday by Dominion Petroleum and the Kenyan Ministry of Energy in Nairobi.
Dominion Petroleum shall now begin the initial exploration period of the PSC. The Company will reprocess 2,500km of 2D seismic data, carry out block wide G&G studies and acquire 500km2 of 3D seismic data in the initial two year exploration period. This will result in a minimum gross expenditure of $6.15mm. Following this initial two year period, the Company can enter the second two-year period by committing to drill a single exploration well.
Block L9 was one of the last remaining prospective opportunities for unlicensed acreage along the whole of the deepwater East African margin. The area is attracting increasing attention from large, well established competitors, as well as stimulating interest from new entrants. Block L9 bears many geological similarities to the Company's Block 7 offshore Tanzania and Dominion intends to use its existing knowledge of the regional geology to maximize the potential of the prospects within the PSC.
Dominion will coordinate exploration activities within the expanded portfolio offshore East Africa to better leverage experience in Tanzania and to achieve better cost efficiencies.
Andrew Cochran, Chief Executive of Dominion Petroleum, commented, "The signing of L9 in Kenya is a significant milestone for Dominion as our deepwater East Africa 'footprint' has grown substantially. We find ourselves amidst some very large companies in both Tanzania and Kenya, still being able to capture L9 under competitive terms in a competitive process. The inclusion of L9 in the deepwater portfolio means that 2012 will be a very active year for the company in what is becoming one of the 'hottest' emerging plays in Africa."
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