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Tuesday, July 22, 2014
Swala Energy reported that its JV partner on Block 12B in Kenya, Tullow Oil, informed the government of Kenya of its intention to proceed into the First Additional Exploration Period (contract years three and four) of the PSC. Under the terms of the PSC the JV is obliged to acquire 300 sq km of 3D seismic data or drill one exploratory well during years three and four.
The interpreted data received so far from the recently completed seismic survey over Block 12B has given Swala and Tullow firm confidence to continue the work program and to commit to drill an exploration well in 2015.
Swala also reported that the third JV partner on Block 12B, Cepsa, opted to withdraw from the PSC saying they would have preferred more time to review the data before having to commit to a drill-or-drop decision. As the company announced in March, Cepsa farmed into Block 12B, with a commitment to carrying the company’s seismic costs up to a maximum of $2.6 million and had also agreed to carry Swala through the first exploration well (should they have elected to enter this First Additional Exploration Period of the PSC).
Dr. David Mestres Ridge, CEO, said “The recent seismic results have provided the technical comfort to both Tullow and Swala to make an informed decision to proceed into years three and four of the PSC and we are excited at the prospect of drilling the first exploration well in this frontier basin. We do however regret that Cepsa has felt it necessary to withdraw from the license after such a short period of time as a joint venture participant. All parties are working together to reduce the impact of this premature withdrawal constructively and we are confident that this will lead to a satisfactory outcome to the matter. With seismic campaigns due to commence over the Pangani and Kilosa-Kilombero licences in Tanzania in the coming months and the high likelihood of our maiden drilling project taking place in 2015 the company is looking to the future with confidence.”
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