Cove Energy Extends Licence for Rovuma Licence

Cove Energy has announced that the Instituto Nacional de Petroleo (INP) of Mozambique has approved a six-month extension to the initial exploration period (Phase 1) for the onshore Rovuma licence (Rovuma Onshore Area). This extends the term of Phase 1 of Rovuma Onshore Area from September 1 2010 to March 1 2011 without further commitments. A notice to enter the second exploration period (Phase 2) will now be due on or about January 30 2011 and Phase 2 will now be reduced by a corresponding six-month period from a term of thirty-six months to thirty months. Formal notification of the extension was given to Cove's partner and the operator of Rovuma Onshore Area, Anadarko Petroleum Corp.

The Rovuma Onshore Area is a 15,000 km2 concession area located in north-eastern Mozambique abutting the Company's Area 1 Offshore Block. The partners of Rovuma Onshore Area are Anadarko (35.70%, operator); Maurel et Prom (27.71%); Artumas Group (11.59%); Empresa Nacional de Hidrocarbonetos de Moçambique (15.00%); and Cove (10.00%).

The partners drilled the Mecupa-1 well in Q4 2009 and encountered excellent reservoir sands and indications of hydrocarbons, which provides encouragement to the future exploration potential of Rovuma Onshore Area. This well was the first to be drilled in the Rovuma Basin since 1986. The well is undergoing an extensive technical evaluation by Anadarko.

Commenting on the time extension, Cove CEO, John Craven said, 'The time extension relating to our Phase 1 work allows the partners to combine the data from the Mecupa-1 well with all exploration data available from seismic work in the block and related data from adjoining blocks to help formulate a comprehensive Phase 2 work programme'.

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