KPMG O&G Report

Good morning all,
Another day closer, another day wiser.

To entertain myself during the wait, I have continued reading and thinking and thought that given that Kenya is mentioned in the KPMG O&G Report, I thought I would have a read and see what it states.

I am amazed by some of my learning here;

1. Up until mid 2013, Kenya had no proven Oil and Gas reserves, in 1 short year - Tullow believes there are reserves of more than 1B barrels. This is incredible and in the case of FAR we got in at an amazing time, I would imagine that the leases alone we picked up would have been bargains compared to what they are worth now.

2. Tullow's 7 subsequent successful drills - I have spoken around this many times and it never ceases to amaze me. I laid down the challenge recently for a negative poster to explain how statistically Tullow could have achieved this. If FAR can achieve the same with our FARMin partners - we will all be celebrating and I will be doing a nudey run down George Street!!

3. Oil production in the region will begin, potentially as early as 2015.

Overall, what impresses me, is the shear speed with which the region is making progress. From 0 - 1B of reserves in 1 year and Oil production as early as 2015.

The section around Kenya is as per below;

http://www.kpmg.com/Africa/en/Issue...ions/Documents/Oil and Gas in Africa 2014.pdf

Oil
Kenya - As of the start of 2013, kenya had no proven oil
reserves, and hydrocarbon exploration dating back to the
1950s had had limited success. however, interest in the
country’s hydrocarbon industry has been stirred since march
2012, when Tullow Oil announced that it had discovered
some oil in the Turkana region.
In mid-2013, Tullow stated that oil resources in kenya were
in the region of 300 million barrels of oil equivalent, which
was higher than “the threshold for development studies to
commence”. Chief Operating Officer Paul mcDade said in
a telephonic interview with Bloomberg that the company
has now “certainly reached the threshold for development”.
Combined, oil output from kenya and Uganda could be in the
region of 500,000 bpd, with a pipeline possibly being in place
by 2018. “when you start to take into account the potential of
kenya, and Lokichar is just the first component of what kenya
could be, it could be much more material than 250,000 barrels
a day. It could easily be 500,000 barrels a day or even beyond
depending on the exploration success we continue to have in
kenya”, according to mr mcDade.
In January 2014, Tullow announced that it had made
two further oil discoveries in northern kenya. These two
discoveries, along with other recent discoveries, raise the
company’s estimate for discovered resources to 600 million
barrels of oil. Tullow believes that the basin has an overall
potential of more than one billion barrels of oil, and said that
further exploration activities will be undertaken over the next
two years. The company currently has a 100% success rate
in the basin with all seven wells drilled discovering oil. Tullow
has agreed with the kenyan government to commence with
development studies. Oil production is projected to start by
2015-16, while there are also plans for an export pipeline.
Initially, though, oil could be exported via rail and road.