"Global is extremely pleased to have secured a firm drilling plan and proposed date for the commencement of exploration drilling in this under-explored province," Global Chairman Dr. John Armstrong said.
The joint venture (Woodside Energy (Kenya) Pty Ltd earning 50% and operator, Dana Petroleum 30% and Global 20%) has scheduled up to two wells to be drilled in Blocks L-5 and L-7 in offshore Kenya in the last quarter of 2006. The actual onset of drilling operations will be dependant on the delivery date of the rig to Kenya, currently scheduled for October this year, and further studies of met-ocean conditions. The Joint Venture has the option to drill a second well immediately following the first well or subsequently when the results of the first well are assessed.
The costs associated with Global's 20% equity in L-5 and L-7 are carried for all activities including the drilling of the first well in each permit. Woodside only earns its equity when these two wells are drilled.
Kenya is a key part of the Global portfolio which also includes oil and gas exploration interests in the Falkland Islands (through the Company's 14% shareholding in Falkland Oil and Gas Limited) and Ireland and Malta.
Dr. Armstrong said that the Kenya acreage has the potential to become a significant oil region:
Drilling will be undertaken using the drillship "Chikyu" which has been contracted by Woodside Energy Ltd through the Norwegian international drilling contractor, Smedvig on behalf of the Japanese Agency for Marine-Earth Science and Technology (JAMSTEC). The rig contract is subject to JAMSTEC board approval anticipated in late April 2006 and assignment to Woodside Energy (Kenya) Pty Ltd subject to the relevant Joint Venture and Kenyan Government approvals.
Dr. Armstrong said that obtaining a rig had proved particularly difficult with very high rig usage and long term rig contracts arising from the strong oil price over the past two years. "Drilling in our Kenya acreage represents a major step forward for the company. We are pleased that the decision to drill has been taken and the first well placed firmly on Woodside's drilling schedule. It is Global's view that in a success case our Kenya acreage has the potential to deliver very significant upside value for shareholders," he said.
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