Sustainability And Strategy

Executing our strategyTo top

Cove was created with a strategy which targeted young geologic basins with evidence of a working petroleum system. In addition our criteria extended to ensure that some or all of the following characteristics to be present in prospects:

• Seismic de–risked prospects – 3D should “light up”
• Emerging Basin preference – better terms, bigger prospects
• Joint Ventures with good operators
• Size Matters – large prospects
• Running Room

Rovuma Offshore Area 1, Mozambique fulfils all these attributes. The first exploration on the block, the Windjammer prospect, presented a 3D seismic signature that literally “light up” when it was processed. Rovuma Offshore Area 1, Mozambique is a frontier petroleum province as no deepwater wells had been drilled off East Africa, let alone Mozambique prior to the drilling campaign initiated by our partnership. In Anadarko we secured a highly regarded and expert operator and partner and the partnership was also enhanced with Bharat Petroleum and Videocon from India and Mitsui from Japan. These latter partners have long term ambitions to discover and monetise hydrocarbon production into their home markets.

Both licence blocks in Mozambique are extensive with the Rovuma Onshore concession covering 3.9 million acres and the Rovuma Offshore Area 1 concession totalling 2.6 million acres. These large licence footprints allow the respective partnerships “running room” to expand our exploration activities outboard of discoveries and to derive the benefit of having the benefit of these large licence areas.

Our Kenyan interests are very extensive totalling over 40,000 sq km. In addition to having Anadarko as operator on the 5 original blocks we acquired from Dynamic Global Associates in July 2010 we have joined with BG Group, Premier Oil and Pancontinental Oil and Gas on blocks L10a and L10b, with BG Group as operator of both blocks.

ManagementTo top

The Board has established the objective to run Cove as an efficient, cost effective, entity. The Company maintains this cost effective structure and contracts-in expertise over the various disciplines from the experienced pool of professionals we work with from our panel of advisers.

FinanceTo top

Cove has been funded through the equity markets and in raising £110 million of new equity in November 2010 to facilitate the projected expenditure commitments into 2012 substantial funding was provided enabling significant financial flexibility for the foreseeable future.

LegalTo top

The Board and senior management are committed to all aspects of good corporate and ethical behaviour. Corporate responsibility and accountability continues to be improved and these attributes are reflected in how the Group is organised and the policies being put in place to ensure Cove complies fully with all its legislative and regulatory requirements.

Cove's Board operates within a clear governance and risk framework for the management of the Group, including its interaction with the operators of its project participations in Mozambique, Tanzania and Kenya, as Cove is non-operating throughout its portfolio.

Legal strategic responsibilityTo top

• Continuing to develop a strong team within Cove by having individuals with excellent commercial, technical and financial skills; and
• Building long-term relationships with local governments, operators and business partners, local communities and other key stakeholders