Simba Energy has announced it has received formal approval from the Government of Kenya for its farm-in agreement with Essel Group.
Under the terms of the farm-in agreement, Essel Group Middle East (Dubai) will earn a 60% participating interest in Simba’s African portfolio, including Block 2A in Kenya, in exchange for providing Simba a full carry through funding of all required exploration as governed by each concession’s respective Production Sharing Contract/Agreement.
Following the approval Simba says Essel has confirmed their commitment to invest over $100 million in Simba’s portfolio in the next 12 to 18 months, including Kenya with the two partners having commenced the planning and scheduling of the next 2D seismic work in support of finalizing locations to drill initial exploration wells at Block 2A, Kenya in 2016.
“With the government’s consent we are very excited to begin our JV investment into Block 2A and look forward to completing the 2D seismic as soon as possible. We believe this next phase of work will yield excellent upside potential for drilling exploration at a number of high quality prospects and targets in Kenya,” says Essel Group Middle East Managing Director Gagan Goel.
The JV partner’s have at the same tme agreed to a minimum exploration program for Block 2A comprising additional 2D seismic, possible 3D seismic, and drilling on at least two prospects over the next 12 to 18 months, with a minimum estimated cost of $60 million USD.
“We expect to finalize arrangements to commence additional seismic work on Block 2A in the next 30 to 60 days. Now that the Government of Kenya has approved the participation of the Essel Group in Block 2A, our shareholders should benefit from the strong exposure of a fully funded and exciting exploration program over the next 12 to 24 months” remarked Robert Dinning, President and CEO.
By acquiring and interpreting up to 500 line kms of 2D seismic data by the end of 2015 the Company expects to finalize drilling locations at two primary prospects, M1 & M3 in the Mandera basin, as well as advance the status of lead A1 and possibly other targets in the Anza basin.
Additionally, this next phase of seismic will confirm depths and support the volume estimates necessary for a revised resource estimate and risk category for the concession’s prospects and other secondary targeted structures.