Centric Energy signs Production Sharing Contract in Kenya

Centric Energy Corp. (CTE) signed a Production Sharing Contact 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 a ceremony in Nairobi, on January 27th, 2010, by the Honourable Kiraitu Murungi, Minister for Energy of the Republic of Kenya, and Alec Robinson, President and CEO of Centric Energy. 

"Block 10BA is a very exciting new exploration opportunity for Centric Energy," said Alec Robinson, "and 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, Centric Energy 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 which is enjoying increasing exploration interest and significant recent success, most notably in the Albertine rift in Uganda, 660 km to the west which is considered to be the closest geological analog to the Tertiary basins underlying Block 10BA. Heritage Oil PLC (HOIL.L) and Tullow Oil PLC (TLW.L) have discovered major volumes of hydrocarbons in the Albertine rift, currently estimated to be more than 1 billion barrels recoverable. 

Block 10BA is relatively under-explored, with the most recent seismic data acquired in 1991. It covers 16,205 square kilometers (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, 75 km to the south of Block 10BA, and encountered oil shows and mature source rocks, demonstrating the presence of a petroleum system (source: Kenya National Oil Corporation). 

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 total of the prospective resources ranges from a low case (P90) of 955 million BOEs(i) up to a high case (P10) of 4,379 million BOEs(i), with a best estimate (P50) of 2,188 million BOEs(i).

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