Taipan Reources (TPN-V) farms out 55% of block 2B, Kenya, to Premier Oil
Oct 15, 2013 - News Release
Taipan Resources Inc., through its wholly owned Kenya-based subsidiary Lion Petroleum Corp., has signed a binding farm-out agreement with Premier Oil Investments Ltd., a subsidiary of Premier Oil PLC, whereby Premier will acquire a 55-per-cent participating interest in block 2B onshore Kenya. Taipan will retain a 45-per-cent interest in block 2B. The company holds its interest in block 2B pursuant to a production sharing contract with the government of the Republic of Kenya.The principal terms of the farm-out agreement are as follows:
- Premier will pay Taipan's working-interest share of the cost of drilling and testing the Pearl-1 prospect, and future costs on block 2B up to a cap of $13,275,000 (U.S.) in addition to its working interest share of costs. The total work programme required under the PSC for the first additional exploration period (as defined in the PSC) is estimated at $29.5-million;
- Premier will provide guarantees for the minimum work and expenditure obligations required under the PSC for the first additional exploration period on block 2B of $13-million (U.S.);
- Premier will pay Lion $1-million (U.S.) as a reimbursement for back costs;
Lion will retain operatorship of block 2B during the exploration phase with Premier having the right to assume operatorship of any development.
Maxwell Birley, chief executive officer, commented: "We look forward to working with Premier Oil, a company with a strong record of exploration and development success. The Pearl-1 exploration well is targeting a tertiary prospect similar to Tullow's Ngamia, Twiga and Ekales discoveries. The company also has multiple prospects similar to Tullow's Eutko discovery. The Anza basin is one of the largest tertiary-age rift basins of the east African rift systems that together contain multibillion-barrel oil discoveries. We believe that the sweet spot of the Anza basin is located on block 2B."
Completion of the farm-out is subject to certain legal conditions, financial audits and other approvals.
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