Cove together with its partners, Anadarko and Dynamic Global Advisers Kenya Limited ("DGA") (together the "Farm Out Partners"), announced that, following the receipt of the consent of the Government of Kenya, represented by the Minister of Energy, all necessary permissions and approvals have been granted to the farm out agreement whereby TOTAL E&P Kenya BV ("TOTAL"), a wholly owned company within the TOTAL S.A group (the "Farm Out Agreement") has agreed to acquire a 30% interest in five contiguous deepwater blocks, L5, L7, L11A, L11B and L12, offshore Kenya (the "5 Offshore Blocks").
As previously announced on September 21, 2011, Cove will contribute 5%, Anadarko 20% and DGA 5% to the Farm Out Agreement. In addition to the Farm Out Agreement. TOTAL have also agreed to purchase DGA's entire interest in the 5 Offshore Blocks. The Farm Out Agreements have now closed and equity transfer has been effected.
The 5 Offshore Blocks cover an area of 30,682 sq km (7.5 million acres) and are located over an extensive Kenya deepwater fairway from the Somalia border in the north to Tanzania in the south. There is a diversity of hydrocarbon play types within the 5 Offshore Blocks that have not yet been tested before in Kenya and which are similar to those that have been successfully explored by Cove and its partners in Rovuma Offshore Area 1, Mozambique, including Upper Cretaceous and Tertiary deepwater fan systems. The 3D seismic surveys over two areas in the 5 Offshore Blocks will be completed shortly with the first exploration well planned in 2012.
John Craven, CEO of Cove Energy, commented, "We are delighted to have completed the farm-in agreement with TOTAL and we are encouraged by the swift response of the Kenyan authorities in approving this transaction.
"We are excited to be taking part in another high impact exploration program offshore East Africa, this time in Kenya, where together with our L10A & L10B blocks we have built a major acreage portfolio. The participation of TOTAL is a further validation of the potential of our Kenyan acreage and is a reward for Cove's early entry into this emerging offshore province".
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