Kenya

Kenya Offshore (L5, L7, L11a, L11B & L12)To top

Cove purchased a 15% interest in five Kenya offshore blocks being L5, L7, L11A, L11B and L12 in November 2010. These were purchased from Dynamic Global Associates, a private Houston based company who now also hold 15%. The operator is Anadarko who hold a 70% interest. Under the Kenyan PSCs, the Government of Kenya has the right to a 10% carry during the exploration phase, which would dilute the partners pro rata.

The area is more than 30,000 sq km covering an extensive deepwater zone from the Somalia border in the north to Tanzania in the south. The area contains similar play types to those encountered in Rovuma Offshore. The partnership has confirmed the reservation of a seismic boat with the expectation that approximately 4,000 sq km of 3D will be acquired during 2011. The plan to bring forward this work stream will accelerate the commitments of the first phase of the additional exploration period, which is due under the PSC to commence in 2012.

The planned work programme for 2011 includes a fast track 3D seismic programme. This work will complement the existing 2D seismic that was acquired in 2010 in the block.

Anadarko has indicated that this 3D seismic work in 2011 will be followed by a drilling programme in 2013.

Cove has a budget of approximately US$6 million for this work in 2011.

Kenya Offshore (L10A & L10B)To top

In February 2011 Cove announced that partnerships in which it holds 25% and 15% interests, were negotiating with the Government of Kenya for offshore blocks L10A and L10B, with BG as operator. A PSC over these blocks was signed and completed with the Government of Kenya on 17 May 2011.

Preliminary work will commence in 2011. Blocks L10A and L10B together cover an area of more than 10,400 sq km in the southern portion of the Lamu Basin offshore Kenya in water depths ranging from around 200m to in excess of 1900m.

They are also adjacent to and inboard of deepwater blocks L11A and L12, both part of Cove’s other Kenyan interests.

Kenya Offshore Partnership – Working InterestsTo top