British firm Bowleven with major focus in west Africa said it has entered into a farm-in agreement to acquire a 50 percent equity interest in onshore exploration block 11B in northern Kenya.
The firm's CEO Kevin Hart said in a statement issued on Tuesday night that it inked the deal with Adamantine Energy Ltd and expressed optimism of making oil discoveries in the country's northern frontier.
Bowleven said it was delighted to add what he called a significant acreage position in Kenya to its operations in Cameroon, where the company has made discoveries that it hopes to bring into production.
"This new acreage affords the company exposure to an exciting new hydrocarbon province for a minimal capital commitment," Bowleven's CEO Kevin Hart said.
Kenya and the entire east African region, has witnessed intensified exploratory activities since 2003, which led to the discoveries of oil and gas in Uganda and Tanzania. There is also ongoing exploration in Ethiopia.
The east African nation has drilled 31 dry wells in Isiolo, (northeastern Kenya) and Lamu (Southeast). Officials said the discovery of the commercial quantities of oil in Turkana, one of the poorest communities, should also ignite new investments in the economy of Turkana.
Many leads and prospects similar to Ngamia 1 have been identified and following this discovery the outlook for further success has significantly improved.
Bowleven has agreed to farm in to the 14,000 square km block 11B in northwest Kenya, six months after Tullow highlighted the potential of the under-explored country by making the Ngamia light oil discovery.
The finding helped encourage increased interest in an area in which exploration activity has been limited because of assumptions that the territory is likely to contain gas rather than oil.
The basins are to the north of the Lokichar Basin where a significant oil discovery has been made in recent months with the Ngamia-1 well.
"Analysis of the existing gravity and magnetics and seismic datasets suggest the basins in block 11B are of similar form to Lokichar and analogous geological plays and petroleum system elements are expected," Hart said.
In return for acquiring this interest, Bowleven will fund the work program for the initial two-year exploration period at an estimated cost of 10 million U.S. dollars.
The initial work program is to include an airborne geophysical survey and the acquisition of 2D seismic.
Bowleven will also provide technical support to Adamantine, as operator, under a TSA during the initial exploration period. Completion of the farm-in is subject to normal approval from the Kenyan authorities.
Chris Matchette-Downes, CEO of Adamantine Energy, said his company was delighted to be working with Bowleven on block 11B which covers the Loeli, Lotikipi, Gatome and South Gatome basins.
He said the two companies have complementary technical and operational skillsets. "As a partnership the two companies are ideally placed to fast track the work program on block 11B, and we look forward to early exploration success," Matchette-Downes said.