Cove Reviews Drilling Campaign Offshore Mozambique

Cove Energy reported that the Belford Dolphin drillship commenced a fully funded four well deep-water program in the Rovuma Offshore Area 1 Mozambique, in December 2009 and is currently drilling on the Windjammer prospect, the first to be evaluated in the drilling schedule. Anadarko Petroleum Corporation is the operator.

The Company expects to release further updates on its ongoing drilling and evaluation program in due course. It is the current intention of the Rovuma Offshore partners to release information on each of the planned four wells after the well has reached its total depth, unless otherwise agreed. 

As announced on December 7, 2009, further evaluation of the Mecupa 1 commitment well results in the Company's Rovuma Onshore Area, Mozambique, are ongoing. 

Royalty agreement with Artumas

Following completion of the acquisition of the Company's 8.5% Mozambique Offshore participating interest ("Mozambique Offshore"), the Company has now finalised a reduction in the royalty interest granted to Artumas Mozambique (Mauritius) Limited ("Artumas Mauritius") from 6.4% to 4.95% of Cove's share of profit petroleum arising from its interest in Mozambique Offshore. This reduction recognises the payment by Cove of certain cash calls and other expenses, prior to completion of the transfer to it of Mozambique Offshore, which has now taken place. 

Mnazi Bay

Proposals to further commercialise existing gas production in the Mnazi Bay gas production and exploration PSC and a plan to recommence exploration activities there are being formulated by the operator, Maurel & Prom, and will be presented to all partners during H1-2010.  

The Artumas Group had invested nearly US $200 million in its Tanzania and Mozambique assets prior to Cove's acquisition of its interests in them and the Directors remain optimistic regarding the current exploration programme and the Board's ability to realise potential value from these prospective hydrocarbon assets.