RE: NEWSCentric Energy plans surveys for block 10BA
Ticker Symbol: C:CTE
Centric Energy plans surveys for block 10BA
Centric Energy Corp (C:CTE)
Shares Issued 91,918,103
Last Close 10/27/2010
.415
Thursday October 28 2010 - News Release
Mr. Alec Robinson reports
CENTRIC ENERGY ADVANCES TOWARD DRILLING IN SUB-SAHARAN AFRICA
Centric Energy Corp. is preparing to embark upon an estimated $65-million (U.S.) program of exploration over the next two to three years, largely carried by its partners, Tullow Oil PLC and Heritage Oil Corp., under the terms of their farm-in agreements.
KENYA
After concluding the farm-out of a 50 per cent interest to Tullow, Centric will hold the remaining 50 per cent interest in Block 10BA, covering 16,205 square kilometres in northwest Kenya. For comparison, the oil-bearing Blocks 1 and 3A in Uganda total only 5,700 sq km. Block 10BA occupies a prime location in the eastern arm of the East African Rift system, and includes the major part of Lake Turkana. Independent experts have identified 27 exploration leads with P50 prospective oil resources totalling 2.2 billion barrels.
The analogous western arm of the rift system includes Lake Albert in Uganda, where resources of about 1 billion barrels of oil have been proven by Tullow , with yet-to-find prospective resources of 1.5 billion barrels. Tullow is farming-in to a 50 per cent interest in Block 10BA.
Tullow is one of Europe s largest independent oil and gas exploration and development companies with over 85 licences in 22 countries producing net 55,800 boepd . Through successful exploration and consistent delivery of major projects, it is becoming Africa s leading independent oil company.
Centric executed definitive farm-in and joint operating agreements with Tullow on September 28th, 2010. The closing of the farm-in is conditional upon the approval of the Kenyan Government and satisfaction of certain other conditions precedent which are expected to be completed by the end of November 2010.
The Tullow Agreement
According to the press release issued by Centric on September 28th 2010: Pursuant to the agreements, Tullow will earn a 50 per cent participating interest in the PSC and will assume operatorship in return for:
reimbursing 50 per cent of Centric Energy's acquisition costs for the PSC which total approximately US$750,000; paying 80 per cent of the first US$30 million of expenditures under the PSC; and assuming 80 per cent of the bank guarantees and parent company guarantees during the period in which it is paying 80 per cent of the expenditures under the PSC.
"Centric Energy is very pleased to have the opportunity to work with Tullow Oil on the exploration of Block 10BA," said Alec Robinson, President and CEO of Centric Energy. "Tullow's success and expertise in a similar geological setting in Uganda will ensure that Block 10BA is explored using the most modern exploration technology and in accordance with recognized international environmental standards and principles. Centric Energy intends to participate fully with Tullow in the exploration program."
Kenya Work Program
The anticipated initial work program on Block 10BA includes 2-D seismic and detailed full-tensor gravity surveys with exploration drilling possible as early as the second half of 2011. The program is designed to explore the area thoroughly and quickly, using the latest technology and was a key part of Tullow s successful exploration program in Uganda. After Government approval of the farm-out, the exploration program will be operated by Tullow, employing the expertise gained through their successful exploration of Lake Albert in Uganda.
Kenya is the one that I think is going to move fastest, Robinson says of Centric s two properties. It s also possibly the one with the more exciting image in the stock market and in the exploration community, simply because of its proximity to the Albertine rift in Uganda with a very similar geological setting, where Tullow and Heritage have discovered 950 million barrels of oil with an upside potential of 1.5 billion barrels. Block 10BA is the size of 65 North Sea blocks, and the old 1984 seismic data, which will be infilled with new data as part of the exploration program, show several deep, undrilled sedimentary basins. Shortly after the government approval comes out we ll be able to announce firm exploration plans to the market. This is expected to consist of a seismic program and a full-tensor gravity survey, at least initially, and probably drilling by late 2011. It s very exciting.
MALI
Although the company s focus is currently on the Kenyan property, Centric s 72,843 square kilometres in Mali is progressing nicely towards anticipated 2D seismic work and the drilling of an exploration well 2011. Centric s wholly-owned subsidiary, Mali Oil Development SARL, originally held a 100 per cent interest in both Blocks 7 and 11 in southeast Mali. In 2008, Centric farmed-out a 75 per cent interest to Heritage Oil Corp., retaining 25 per cent, and is now fully-carried through the obligatory seismic program and first exploration well.
Heritage Oil is an independent, international oil and gas exploration, development and production company with a focus on primarily frontier areas in Africa, the Middle East and Russia. The company has been highly-successful with this strategy and, for example, in 1997 was first company to explore for oil in Uganda after more than 60 years. Heritage discovered the first oil there with the Kingfisher 1 well in 2006/2007 . Heritage recently sold its interests in Uganda to Tullow, for US$1.45 billion.
Blocks 7 and 11 in Mali cover 72,843 square kilometers, the size of 290 North Sea Blocks with only one exploration well, drilled in 1976. Geologically they are in the Central African Cretaceous rift system, and existing 1974-vintage seismic data on the blocks show up to 15,000 feet of untested Cretaceous sediments. A nearby water well has well-documented oil shows. Neighbouring analogous rift basins include the Agadem block in Niger, with a reported 350 mm barrels of oil in place in Cretaceous-age reservoirs .
Mali Work Program
Regarding its 2010 work program, Heritage as operator has budgeted for up to 876 kilometers of 2D seismic with firm plus contingent budgets of US$20 million, to be followed by seismic interpretation leading to possible exploration drilling during 2011. Centric Energy is fully-carried through this seismic program and first exploration well.
CENTRIC MANAGEMENT
Centric regards its highly experienced management team as one of its strongest assets with over 140 years of experience between them.
President and CEO Alec Robinson boasts over 40 years of international E&P experience, mainly with Amoco Corporation (NYSE: AN) in overseas locations across the world, including management of both exploration and production operations at a senior level, and extensive experience working and negotiating with host governments and state oil companies.
Chairman Darren Devine has over 20 years experience in international corporate finance with a focus on early stage energy companies, while Vice President - Exploration Chris Lewis adds another 20 years in international exploration and management.
Vice President - Engineering Mike Harrison is a petroleum engineer with 30 years international industry experience and Paul Griggs, Head of Business Development, has 30 years business development and capital markets experience including positions with Sterling Energy and OMV. Combine that with Chief Financial Officer Andy Bell s more than 25 years in the independent oil sector and that makes a strong management team.
FUTURE OUTLOOK
Centric Energy is moving forward. The successful strategy of managing its financial exposures by farming-out to reduce cost while retaining significant upside, has seen the company s share price increase 5-fold from
.08 in March 2010 to over
.415 at present. With just over 92 million shares issued and market capitalization of over $38 million, Centric remains ambitious and focused on property advancement and expanding its sub-Saharan Africa portfolio
? 2010 Canjex Publishing Ltd.
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