Africa Oil (PINK:AOIFF) completes deal with Marathon Oil (NYSE:MRO) on Kenya BZF
The Canadian oil and gas firm Africa Oil said on Monday it has completed an agreement with Marathon Oil to acquire an interest in two of Africa Oil’s Kenyan exploration blocks.
Under the farmout agreement, Marathon Oil acquired a 50% interest in Block 9 and a 15% interest in Block 12A, both in the East African nation.
“We are very pleased to welcome Marathon Oil as a partner with their stature and long history of success in the oil and gas business. We look forward to working together to expand on the success we have had in our East Africa exploration program to date, ” Africa Oil CEO Keith Hill said in a statement.
Hill said net working interests are subject to back in rights or carried working interests, if any, of the respective governments or national oil companies of the host governments.
The statement said Marathon Oil paid Africa Oil an entry payment of US$32-M which includes reimbursement for prior expenditures, and has agreed to fund Africa Oil’s working interest share of future joint venture expenditures on these blocks to a maximum of US$25-M, anticipated to be spent over the next 3 yrs.
Mr. Hill said the consideration to be received from Marathon Oil will allow them to both accelerate the exploration in the blocks that Marathon Oil is farming into as well as provide additional funding to the company for the accelerated exploration program on the Tertiary rift trend being executed in partnership with Tullow Oil (PINK:TUWLF).
“East Africa is rapidly becoming the most prospective oil and gas province in the world and the large, strategic land portfolio we hold ensures we will be at the center of industry activity,” he said.
Kenyan officials have been optimistic about possible Oil finds following the ongoing exploration by British Oil and Gas firm, Tullow, which is also engaged in activities around the Mandera region in northern Kenya.
Exploration experts say the semi-arid regions of northern and north-eastern Kenya, have the curvy rocks, formed millions of years back, when the region was an ocean.
The creation of the deep sea blocks is meant to attract new investors into the country, especially along the Indian Ocean.
He said the block owned by the company is surrounded by “significant oil and gas” reserves based on seismic data gathered by the company and other prospecting companies in the area that include Africa Oil, Marathon Oil and Taipan.
Simba Energy which is a listed Canadian company has already signed a production sharing contract with the Kenyan government.
The company said it expects to start drilling in 8 months, starting with the well located in south of the Wajir County that has showed greatest potential.
The new find if confirmed will make Kenya a key new player in the continent’s Oil business in the next 5 yrs when production is likely to start.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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