Premier Oil Farms into Onshore Block 2B in Kenya

Premier Oil plc announced Tuesday that it has signed a farm-in for 55 percent of Taipan Resources Inc. (Taipan) license interests in Block 2B, onshore Kenya. The block lies in the Southern Anza basin, a Cretaceous rift basin with proven source rock, and contains several prospects and leads. The Pearl prospect with an estimated gross prospective resource of 100 million barrels of oil will be targeted by the initial well. The remaining lead inventory is capable of delivering in excess of 500 million barrels gross.

Under the agreement, Premier will pay Lion Petroleum Corp. (Lion), a wholly-owned Kenyan-based subsidiary of Taipan, back costs of $1 million. Premier will also pay Taipan’s working interest share of the cost of drilling and testing the Pearl prospect and future costs on Block 2B up to a cap of $13.275 million. Premier has the option to assume operatorship of any future development on the block.

Completion of the farm-in is subject to satisfactory completion of financial audits and confirmation of the terms of the Production Sharing Contract (PSC) from the Kenyan government.

Simon Lockett, Chief Executive, commented:

“We are delighted to have reached an agreement with Taipan and obtained acreage in the emerging onshore rift plays of East Africa. Rift basins are a core play for Premier and in this instance we have gained access to a play opening opportunity with meaningful follow on potential.”

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