Cove provided the following operational update.
Rovuma Offshore block 1 (Mozambique) - A Multi TCF Exploration Success:
Further exploration running parallel with appraisal and commercialization of discoveries:
Adjacent drilling success to have positive impact - Cove and its partners have first mover advantage with ambition to have the first LNG infrastructure in East Africa and with two committed drilling rigs ensuring continuous exploration and appraisal in this emerging hydrocarbon basin.
Indicative Valuation of initial Mozambique Offshore discoveries (Cove Share)
Kenya Deepwater Offshore (L5, L7, L11A, L11B & L12)
New Kenya blocks under negotiation - L10A & L10B - Cove in consortia operated by British Gas.Mnazi Bay Tanzania
John Craven, CEO of Cove commented, "2010 was a year of extraordinary exploration success for Cove and all the stakeholders in our offshore Mozambique block. Considering that Cove is part of the first commercial hydrocarbon discovery in deepwater East Africa simply reinforces the magnitude of what has been achieved.
"I am delighted to be able to confirm that throughout 2011 we will be building on the Mozambique success having already begun the appraisal program to commercialize the discoveries. At the same time we are now laying down the platform to drive forward an extensive exploration drilling program, having already commenced the acquisition of a new 3D seismic survey which, with the deployment of a second deepwater rig later this year, ensures continuing exploration of the gas and oil potential within this prolific offshore block, which has only been partially explored to date.
"Our internal economic study of a Mozambique LNG project is broadly in line with Anadarko's valuation released in their February investor conference. Our study is based on the resources only from the existing 4 gas discoveries made to date and does not include the considerable exploration potential offshore Mozambique, nor the remainder of our extensive East Africa portfolio in Mozambique, Tanzania and Kenya.
'In the Kenya deepwater blocks we are accelerating the work program with a planned 3D seismic survey this year followed by drilling planned for 2012. It has been indicated that a rig slot may be available to the Kenyan partnership from the rig capacity of the Mozambique program during 2012 or 2013.
"We are also actively pursuing a number of new venture opportunities which is important for continued growth.
"Finally the successful fundings that were put in place in 2010 mean that we have the financial firepower to capture the value from what is an extensive and exciting exploration, appraisal and testing program going forward."
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