Pancontinental Awarded Acreage in Kenya

Pancontinental Oil & Gas NL in partnership with Afrex Limited, has reached agreement with the Government of Kenya for the award of three large, prospective, shallow water, onshore/offshore blocks designated L6, L8 and L9. The total area of these 3 blocks is 21,400 square kilometers (5,288,000 acres) and represents the majority of Kenya’s near-shore territorial waters, immediately north of its main port of Mombassa.

The Production Sharing Contracts which will be held by Pancontinental (40%) and Afrex (60%), will grant an exclusive right to the companies to explore the area, subject to the formal execution in Nairobi of the relevant documents and the payment of applicable fees. These formalities are scheduled to be concluded in May. Afrex is an overseas company of which Mr. H. D. Kennedy, Chairman of Pancontinental, is a director. As part of the Kenyan agreement, the co-venturers have agreed to undertake an initial work program, consisting of seismic reprocessing and interpretation, to further evaluate a number of large Upper Mesozoic to Lower Tertiary age clastic and carbonate prospects and leads recognized during earlier investigative work. These strata appear to have all the components necessary to host significant hydrocarbon discoveries, similar to the major offshore Songa-Songa gas field discovery in neighboring Tanzania. Songa-Songa is now under development, including the building of pipelines and power generation infrastructure. This project will be the first to provide an indigenous energy source for East Africa's otherwise totally import dependent power generation, industrial, transport and domestic petroleum requirements.