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Avana Awarded New Licensing Opportunity in Kenya

Source: www.gulfoilandgas.com 3/24/2011, Location: Africa

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Avana Petroleum is pleased to announce the award of Offshore Block L9 in the Lamu Basin, Kenya. Avana will hold a 10% interest in the L9 Joint Venture with 60% being held by Dominion Petroleum Limited, which will be operator, and 30% being held by Flow Energy Limited.

Last week, a Heads of Agreement was executed with the Government of the Republic of Kenya. This defines the terms of the Production Sharing Contract (PSC) for the Block, the award of which is subject to the signature of the PSC with Kenya's Ministry of Energy. Signing is currently set for April 2011 in Nairobi.

Block L9 is amongst the last available and most attractive new licensing opportunities in the East African offshore. The block has many geological similarities with the offshore Tanzanian plays that have recently been drilled with considerable success.

One well exists on block L9, Simba-1, which was drilled in 1979 and encountered gas shows in the Tertiary and upper Cretaceous. A working hydrocarbon system in the Lamu basin is evidenced both by the results of Simba-1 and offshore oil seeps identified to the north of block L9.

Sam Malin, Director of Avana Petroleum commented:

"The prospectivity of the Lamu Basin is significant and the award of Block L9 complements our existing regional interests in the East African Margin/Western Indian Ocean region.

The award of L9 to Avana and its partners is the culmination of a highly competitive bid process involving strong high quality competition and reflects the excellent contacts, presence and track record that Avana and its partners have built in the region and the strength of Flow's track record and contacts in Kenya.

Avana looks forward to working with its partners, Dominion and Flow, and with the Kenyan Ministry of Energy and other relevant Kenyan counterparts to improve the understanding of the recognised hydrocarbon potential of Block L9 and to work towards transforming this potential into production."

The Initial Exploration Period of the PSC is for two years from signature and entails a gross minimum work commitment of $6.15 mn inclusive of a requirement to acquire 500 km2 3D seismic data.

After the Initial Exploration Period, there is an option to relinquish the PSC or commit to a further two-year exploration period with an obligation to drill one well during that further period.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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