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Premier Oil Commits $30 Million to Taipan’s Block 2B in Kenya

Monday, 21 October 2013 09:00 AM

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By Resource News Report

On October 15, 2013 Taipan Resources (TPN-TSX.V) announced the signing of a binding farm-out agreement with Premier Oil (PMO-LSE) whereby Premier will acquire a 55% participating interest in Block 2B onshore Kenya by investing up to $30 million in exploration expenses.

Premier Oil is a leading FTSE 250 independent exploration and production company with interests in the North Sea, South East Asia, the Middle East, Africa, Pakistan and the Falkland Islands.

 

Premier Oil’s portfolio of producing assets delivered production of 58,600 boepd in the first half of this year, and it has various projects in the development phase which should increase production to over 100,000 boepd in the medium-term.

Premier became active in Kenya in 2011 with the signing of two PSCs for offshore exploration blocks L10A and L10B.

Mr. Maxwell Birley CEO of Taipan Resources commented, "We look forward to working with Premier Oil, a company with a strong track record of exploration and development success".

The principal terms of the farm-out agreement are as follows:

  • Premier will pay Taipan's working interest share of the cost of drilling and testing the Pearl-1 prospect and future costs on Block 2B up to a cap of US$ 13.275 million in addition to its working interest share of costs. Premier is spending $29.5mm on Block 2B including Taipan’s carry.
  • The total work programme required under the PSC for the First Additional Exploration Period is estimated at $29.5 million.
  • Premier will provide guarantees for the minimum work and expenditure obligations required under the PSC for the First Additional Exploration Period on Block 2B of US$13.0 million.
  • Premier will pay TPN US$1 million as a reimbursement for back costs.

 

 

TPN will retain operatorship of Block 2B during the exploration phase with Premier having the right to assume operatorship of any development.

Taipan has interests in Block 1 and Block 2B onshore Kenya   The Company's 20% working interest in Block 1 is operated by East Africa Exploration, a subsidiary of Afren plc.

Taipan Investment Highlights:

  • Kenya is the world’s top onshore oil exploration area
  • Estimated 22.7 billion barrels gross un-risked prospective resources
  • Only 58 wells drilled in Kenya
  • 11 wells planned for next 12 months with 6 active rigs from Q4 2013
  • 20 wells planned in 2014
  • Tullow discoveries in Kenya have exceeded threshold volumes for development
  • Taipan is the 4th largest gross acreage holder in Kenya
  • The Anza Basin – proven petroleum system and one of the largest Tertiary-age rift basins in East Africa
  • Taipan block 2B believed to be in the basin “sweet spot”
  • TPN’s first well planned 2014 – one well Block 2B, one well on Block 1
  • Oct, 2013 Farm in Agreement signed with Premier Oil
  • Premier earn 55% interest for a gross investment up to $30.0 million
  • Taipan fully funded through the drilling of first well on Block 2B
  • Africa Oil Block 9 Bahasi-1 well spudded Best Estimate 320 mmbbls
  • Sala well to be spudded in 2014 Best Estimate 402 mmbbls
Kenya is the world’s top onshore oil exploration area Estimated 22.7 billion barrels gross un-risked prospective resources Only 58 wells drilled in Kenya 11 wells planned for next 12 months with 6 active rigs from Q4 2013 20 wells planned in 2014 Tullow discoveries in Kenya have exceeded threshold volumes for development Taipan is the 4th largest gross acreage holder in Kenya The Anza Basin – proven petroleum system and one of the largest Tertiary-age rift basins in East Africa Taipan block 2B believed to be in the basin “sweet spot” TPN’s first well planned 2014 – one well Block 2B, one well on Block 1 Oct, 2013 Farm in Agreement signed with Premier Oil Premier earn 55% interest for a gross investment up to $30.0 million Taipan fully funded through the drilling of first well on Block 2B Africa Oil Block 9 Bahasi-1 well spudded Best Estimate 320 mmbbls Sala well to be spudded in 2014 Best Estimate 402 mmbbls - See more at: http://www.resourcenewsreport.com/premier-oil-commits-30-million-to-taipans-block-2b-in-kenya/#sthash.pJcS5A6Q.dpuf
Kenya is the world’s top onshore oil exploration area Estimated 22.7 billion barrels gross un-risked prospective resources Only 58 wells drilled in Kenya 11 wells planned for next 12 months with 6 active rigs from Q4 2013 20 wells planned in 2014 Tullow discoveries in Kenya have exceeded threshold volumes for development Taipan is the 4th largest gross acreage holder in Kenya The Anza Basin – proven petroleum system and one of the largest Tertiary-age rift basins in East Africa Taipan block 2B believed to be in the basin “sweet spot” TPN’s first well planned 2014 – one well Block 2B, one well on Block 1 Oct, 2013 Farm in Agreement signed with Premier Oil Premier earn 55% interest for a gross investment up to $30.0 million Taipan fully funded through the drilling of first well on Block 2B Africa Oil Block 9 Bahasi-1 well spudded Best Estimate 320 mmbbls Sala well to be spudded in 2014 Best Estimate 402 mmbbls - See more at: http://www.resourcenewsreport.com/premier-oil-commits-30-million-to-taipans-block-2b-in-kenya/#sthash.pJcS5A6Q.dpuf

Taipan management has discovered over 3.75 billion barrels of oil equivalent in similar early stage basins with success rates up to 80%.

 

"The Pearl-1 exploration well is targeting a Tertiary prospect similar to Tullow's Ngamia, Twiga and Ekales discoveries," states Birley, "We believe that the 'sweet spot' of the Anza Basin is located on Block 2B."

In Premier Oil, Taipan has a senior partner with $180 million cash on hand, fully invested in the success of Block 2B in Kenya.

TPN is currently trading at .29 with a market cap of $29 million.

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