Cove announced its final results for the 12 month period ended December 31, 2010.
- Mozambique Rovuma Offshore Area 1
- Drilling success - Three major gas discoveries, oil encountered:
- Windjammer (555 ft net gas pay)
- Barquentine (416 ft of net gas pay)
- Lagosta (550 ft of net gas pay).
- Ironclad well encounters oil
- Validation of seismic model
- Commercialization/Contingent Gas Resources
- Combined gas resources sufficient to support monetization through Liquefied Natural Gas ("LNG") development.
- Contingent Gas Resources for combined Windjammer/Barquentine/Lagosta ("Palma Gas Area") discoveries estimated to be 12 TCF (Pmean).
- New Ventures
- Acquired 15% interest in 5 contiguous deepwater blocks offshore Kenya
- Successful equity funding combined with significant capital appreciation
- £136 million ($210 million) raised in new equity
- 2011 - Year to Date - Highlights
- Tubarao Gas Discovery (110 feet net gas pay) - Contingent Gas Resources in excess of 1 TCF (Pmean).
- Cove recognize the potential for substantial additional upside resource potential to the Palma Gas Area and Tubarao discoveries based on new interpretation of existing seismic and well data
- Circa 4,000 sq km new 3 D seismic program underway in Rovuma Offshore
- Commitment to 2 deepwater rigs for Q4 2011 for exploration, appraisal and testing in Rovuma Offshore
- Appraisal program of Palma Gas Area of Rovuma Offshore commenced. Extensive coring program at Windjammer discovery completed, rig now at Lagosta wellsite.
- LNG Development planning underway
- Interest acquired in 2 further blocks offshore Kenya
Cove has established a unique, highly valued and coherent asset portfolio offshore East Africa that offers shareholders numerous material and exciting drilling opportunities in years to come.
Mozambique Rovuma Offshore Area 1
- Pursue Mozambique LNG project whilst exploring appropriate monetization opportunities to capture the underlying value of the LNG project and exploration potential.
- Aggressive oil and gas exploration and appraisal program planned to continue to 2014 with the availability of the new 3 D seismic data coinciding with the introduction of a second deep water rig in Q4 2011.
- In recent months there has been a marked increase from potential gas buyers (including some of the offshore partners) to commence dialogue to acquire future LNG.
Mnazi Bay - Tanzania
- The partnership is continuing negotiations to secure gas sales agreements with potential customers including cement manufacturing and power plant operators. Pending successful outcome of these negotiations the partnership will develop an appropriate exploration and appraisal program in the license area.
- More than 3,500 sq kms of new 3 D seismic will be acquired during 2011 in the 5 contiguous deep water blocks operated by Anadarko.
- Exploration operations to commence on the recently obtained L10A and L10B offshore blocks.
- Management focused on securing new ventures opportunities with dynamic work programs to continue to drive the Company's strategy
- Current portfolio expenditure commitments funded into 2012
Michael Blaha, Chairman of Cove commented, "2010 was a remarkable second year for Cove in which the company transformed the assets that we acquired in 2009 from Artumas with world class exploration successes that added significant contingent gas resources that is to form the basis for a significant LNG project. In addition Cove has expanded its portfolio with some strategic exploration positions in 7 deep and shallow water blocks in Kenya. In our strategy we remain focused on geology in emerging basins with intensive exploration and appraisal programs executed by competent operators. We have established ourselves as a reliable company that is focused on creating shareholder value on the basis of a very clear strategy.
Cove's participation in the Rovuma Offshore Area 1 gas discoveries has positioned the Company in a leading LNG project. The Rovuma Offshore Area 1 partnership has commenced an aggressive appraisal, development and commercialization program; which aims for investment sanction of the LNG project in Q3 - 2013. We continue the exploration program on the numerous high priority oil and gas targets which will be supported by the additional 4,000 sq km 3D seismic that will be integrated with the existing 3,000 sq km 3D seismic. We aim to search for additional gas resources to support an ever expanding LNG project and we are hopeful of discovering an oil resources in the south following the oil encountered in Ironclad well during 2010.
I and the Cove Board are confident that the combined exploration and appraisal programs, currently underway on our East Africa portfolio, will achieve continuing significant growth for shareholders in what promises to be an exciting future.
"Finally I am grateful for all the support that was given to us by our consultants, advisors and my colleague directors. This group of people has formed a nimble "fit-for-purpose" and professional team. Without this team we could not have achieved today's tremendous position in a period of under two years since the company was initiated.