Simba Granted PSC for Kenya Block

- Simba Granted PSC for Kenya Block

Wednesday, August 03, 2011
Simba Energy Inc.

Simba has been granted a Production Sharing Contract (PSC) by the Ministry of Energy, Republic of Kenya for Block 2A, comprising 7,801.72 square kilometers in northeast Kenya.

"We are delighted in having been awarded this PSC from the Republic of Kenya's Energy Ministry. This is a major achievement for the Company and further supports our strategy to pursue underexplored and overlooked onshore basins in Africa. While we remain very close to finalizing other PSC applications elsewhere, Block 2A's PSC provides our shareholders a very significant boost in near term upside exploration potential for the Company. It has been a lot of work to get to this point so we are extremely pleased," remarks Robert Dinning, President & CEO.

Block 2A overlies the southern tip of the Mandera Basin while the southwest corner of the block extends into the Anza Basin. Block 2A also has excellent potential for significant oil and gas discoveries as evidenced by the following evaluation highlights:

• The Mandera Basin is Permo-Triassic to Tertiary in age with a sediment thickness of 10,000 meters. Potential source rock interval is mid Jurassic-Lower Cretaceous and comparable with the larger Mandera-Lugh basin in Ethiopia and Somalia
• Only four wells have been drilled in the Mandera basin with oil shows encountered at 40-44m in the Tarbaj stratigraphic well drilled by Total
• In the Anza basin lower Cretaceous reef structures have been mapped with a potential reservoir thickness of 300m-500m. Source rock is likely Lower Cretaceous. The eleven wells drilled in the Anza Basin have encountered oil shows and/or gas shows
• Present 2D seismic coverage, although regional in nature, identified numerous structures and a major stratigraphic pinch-out. The limited seismic coverage available indicates a stable stratigraphic sequence with some very good exploration leads
• Remaining of exploration interest to the Company is the flank of the basement high structure where two AMOCO wells drilled in 1987 (ELGAL#1 to 1,280 meters in Permian Karroo and ELGAL#2 to 1,908 meters in Triassic Karroo) were plugged and abandoned as no reservoir rocks were encountered
• The area of the block overlying the Mandera basin is of particular interest as the analysis of the oil from the seeps at Tarbaj although severely biodegraded indicate a source rock maturity for the Mandera basin which is well within the oil window

The Company will immediately begin re-interpretation of all available existing data, as well as initiate baseline environmental work, to support the design and planning of a new seismic acquisition program.

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