Kenya Gives Green Light to Centric/Tullow Deal

Centric Energy Corp. has received approval from the Kenyan government for the farm-out of a 50% stake in Block 10BA to Tullow Oil.

The terms under the farm-out agreement will have Tullow earning a 50% participating interest in the PSC and assuming operatorship in return for reimbursing 50% of Centric’s acquisition costs for the PSC which totaled approximately $750,000.

Tullow will also pay 80% of the first $30 million of expenditures under the PSC. The Irish firm will also assume 80% of the bank guarantees and parent company guarantees during the period in which it is paying 80% of the expenditures under the PSC.

Kenyan Government approval was one of the conditions precedent for finalizing the farm-out to Tullow.

The final condition is the settlement of the judicial review application filed against the Kenyan Ministry of Energy relating to six exploration permits granted by the Ministry, including the Company's PSC covering Block 10BA. As advised in a news release dated October 28, 2010, the next court hearing is scheduled for November 16, 2010. Meanwhile, the Kenyan Ministry of Energy has advised the Company that it can carry on with its work program and that its PSC remains in good standing.

"Centric Energy is very pleased to receive the Kenyan Government approval of the farmout to Tullow Oil," said Alec Robinson, President & CEO of Centric Energy. "Tullow's success and expertise in the very similar geological setting of the Albertine Rift in Uganda will ensure that Block 10BA is explored rigorously and without delay, using the most modern exploration technology and in accordance with recognized international environmental standards and principles. Centric Energy looks forward to working closely alongside Tullow on this outstanding exploration opportunity."