Premier Oil signs farm-in deal for onshore Kenya block

The block lies in the Southern Anza basin. (Image source: Premier Oil)The block lies in the Southern Anza basin. (Image source: Premier Oil)Premier Oil has signed a farm-in for 55 per cent of Taipan Resources' license interests in Block 2B, onshore Kenya

The block lies in the Southern Anza basin, a Cretaceous rift basin with proven source rock, and contains several prospects and leads.

The Pearl prospect, with an estimated gross prospective resource of 100mn barrels of oil, will be targeted by the initial well.

The remaining lead inventory is capable of delivering an estimated 500mn barrels gross.

Under the agreement, Premier will pay Lion Petroleum, a wholly-owned Kenyan-based subsidiary of Taipan, back costs of US$1mn.

Premier will also pay Taipan’s working interest share of the cost of drilling and testing the Pearl prospect and future costs on Block 2B up to a cap of $13.275mn.

Premier has the option to assume operatorship of any future development on the block.

Completion of the farm-in is subject to the satisfactory completion of financial audits and confirmation of the terms of the production sharing contract (PSC) from the Kenyan government.

"We are delighted to have reached an agreement with Taipan and obtained acreage in the emerging onshore rift plays of East Africa," said Simon Lockett, chief executive of Premier Oil.

"Rift basins are a core play for Premier and in this instance we have gained access to a play opening opportunity with meaningful follow on potential.”

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