MercoPress. South Atlantic News Agency

Premier Oil, with Falklands’ interests buys into exploration project in Kenya

”We are delighted to have reached an agreement with Taipan” said CEO Simon Lockett

Premier Oil, which has a farm in agreement with Falkland Islands Rockhopper Exploration, is buying into an exploration project in Kenya, by farming into onshore Block 2B.

Through a deal with Taipan Resources, it is paying one million dollars upfront and it is agreeing to pay up to 13.275 million of Taipan’s share of future drilling costs.

Block 2B hosts the Pearl prospect which has been estimated at 100mln barrels of oil. More broadly, Premier says, Block 2B’s current exploration lead inventory is delivering in excess of 500mln barrels of oil.

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

“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.”

Kenya is fast becoming an exploration hotspot with growing interest across the industry, particularly given Tullow Oil’s onshore oil discovery in the west of the country and the large exploration successes regionally (offshore Tanzania and Mozambique).

Premier Oil’s moves onshore Kenya will be closely followed by investors in Simba Energy, a Toronto listed explorer with a following in London, as it has the neighbouring Block 2A.

In May this year, Simba sealed its own farm-out deal, with private equity backed Dutch firm Ajax Energy, which secures a work programme worth around 36.5 million dollars.