Pancontinental Oil & Gas NL says that the Kenyan government has granted a 12-month extension to the current initial exploration period of the L10B offshore license in Kenya. Following the current period (as extended), the joint venture can then elect to move into the first additional exploration period of the license.
Pancontinental considers this to be extremely favorable because it gives the joint venture partners more time to assess the impact of the Sunbird-1 discovery in the adjacent L10A area (PCL 18.75%) and its implications for possible future drilling in L10B.
Pancontinental intends to use the extended period to secure a farm-in agreement for any future L10B drilling. L10B has a number of large prospects and leads identified using 3D seismic, and these are being examined as potential exploration drilling targets.
Pancontinental has notified BG Group, the London-listed FTSE-100 company that operates the license, and the other joint venture participants, that it will increase its stake in L10B from 15% to 20%.
Pancontinental has increased its stake in L10B by taking up its pro-rata share of the interest held by Premier Oil, which has elected to withdraw. The changes in interests are subject to the approval of the Ministry of Energy and Petroleum of Kenya and such approval is not expected to be withheld.
Pancontinental will increase its stake prior to June 15, subject to Ministry approval.