FAR’s (Pancon’s partner in Kenya Block L6) 3rd Quarter update
Kenya Block L6
FAR 24% on-shore & Operator 60% Off-shore & Operator
Pancontinental 16% on-shore 40% Off-shore
Milio Group 60% on-shore
http://far.live.irmau.com/IRM/ShowD...unceGuid=ec86b109-c8d9-4d28-8b7f-7722a0a354d4
Section about Block L6, Kenya
In February of this year, FAR completed it’s third farmout to the Milio group of companies (reference: FAR ASX release 04/02/2014). As a result, FAR is fully carried through an onshore well and an onshore 2D seismic survey and associated processing and interpretation. The seismic survey was due to commence in June. A number of recent security incidents in the northern coastal area of Kenya have delayed the start of these seismic operations and as aresult, the L6 joint venture was awarded a one year extension to the current PSC terms by the Government of Kenya. FAR is working with Milio and the Kenyan Ministry of Energy and Petroleum to monitor the situation and put in place appropriate risk mitigation strategies before commencing on ground operations.
The farm out agreement with Milio and the associate d carried work program relate to the onshore portion of Block L6 only where FAR has retained a 24% free carried interest.
An onshore discovery in L6 provides the potential for gas to be used as feedstock for domestic power generation in the near term.
In relation to the offshore portion of Block L6 where FAR has a 60% interest, FAR is currently progressing a farm out initiative for drilling an offshore well. The recent Sunbird-1 discovery well drilled by the BG Group in the nearby Kenya Block 10A targeted a Miocene reef structure. The Miocene reef play extends along the coast of Kenya and through both of FAR’s offshore blocks, L6
and L9. With the discovery of oil in the Sunbird-1 well at the southern extent of the Miocene reef play and evidence for oil in the Maridadi well drilled at the northern extent in L6, FAR has had strong industry interest in its L6 farm out opportunity but reports that the timetable to conclude a farmout deal will likely slip to early 2015.
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