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Monday, 10 September 2012

Pancontinental strikes natural gas off Kenya's Lamu coast in the Mbawa well.

Pancontinental Oil & Gas an Australian prospecting company announced today it has struck natural gas off Kenya's Lamu coast in sands of the Mbawa well (L8).

The discovery contains 52 net metres (~170ft) of natural gas pay. Signaling that Kenya has joined the ranks of potential natural gas producers. The announcement also recommends continued drilling to a deeper target with potential of a larger discovery.

Kenya now joins Tanzania and Mozambique on the east coast of Africa as a potential natural gas producer.

According to a Kenyan local Daily, The Business Daily, yesterday, Pancontinental had halted trading of its shares, pending an announcement expected today. This has now come to pass.

Pancontinental, which has been drilling the Mbawa deep-water well (L8) within a joint venture with Apache Corporation of the US as the well operator, said it had requested a halt in the trading of its shares at the Australian Securities Exchange (ASX) ahead of this announcement.

According to a notice by the ASX, the halting was done on Thursday, September 6, and is scheduled to end any time from today.

The Kenya L8 Mbawa Joint Venture consortium consists of-

Apache Corporation (Operator) 50%
Origin Energy Limited 20%
Pancontinental Oil & Gas NL 15%*
Tullow Kenya B.V. 15%

*Pancontinental’s 15% interest is “free-carried” through Mbawa drilling by Tullow Oil plc up to a
“cap” of US$ 9 million (as reduced by other exploration expenditure). After the first earning phase Tullow has an option to earn a further 5% by providing funding on Pancontinental’s behalf to a cap of US$ 6 million in any second well.

Just as I predicted in my previous postings there is more to come from the off shore basin of the Eastern African coast.