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ERHC Energy Inc. signs production-sharing contract for onshore oil block in Kenya

HOUSTON - ERHC Energy Inc., an American company with oil and gas assets in Sub-Saharan Africa, announced that it has signed a production-sharing contract (PSC) with the government of the Republic of Kenya on Block 11A in northwestern Kenya. The block is in the vicinity of Block 10BB, where significant oil discoveries have recently been announced.

Block 11A encompasses 11,950.06 sq km or 2.95 million acres. The block is situated on Kenya’s border with South Sudan to the north, Block 11B and Lake Turkana to the east and near Kenya’s border with Uganda to the west. The block is ERHC’s first exploration acreage in East Africa and further diversifies the Company’s portfolio of oil and gas assets, which also includes deepwater interests in the Gulf of Guinea and onshore blocks in Chad.

East Africa has emerged in recent years as one of the more interesting new oil provinces in the world with the discovery of over 1 billion bbl of recoverable oil in Uganda’s Block 1 (EA1), the Ngamia-1 oil discovery in Kenya, which is estimated to be bigger than the Ugandan discovery, and large gas discoveries, including the recent Zafarani find, offshore Tanzania.

“We are building on past successes and leveraging ERHC’s unique advantages in Africa to dynamically grow our exploration acreages and build shareholder value,” said ERHC President and CEO Peter Ntephe. “Competition for exploration acreages in Kenya is currently high and we are delighted that ERHC has been awarded the rights to explore one of the highly prospective blocks. We look forward to working closely with the government and people of Kenya on a mutually beneficial exploration program.”

The regional geology and structural evolution of Block 11A is dominated by the Cretaceous Central Africa Rift System (CARS) and the Tertiary East Africa Rift System (EARS) with the associated basin depositional trends. The main surface feature of Block 11A is the Lotikipi plain. This broad depression measures approximately 110 km from east to west.

The proximity and in-trend relationship between the Lotikipi plain and the Abu Gabra Rift basins of southern Sudan suggest high oil and gas prospectivity. The southern Sudan basins are established petroleum provinces. Surface exposures of the sedimentary units with potential source and reservoir value, represented by the Cretaceous/Paleogene Lapur Formation of the Turkana Grits, give an indication of the sediments that might be encountered beneath the Lotikipi plain.

Gravity data, acquired earlier in the area, enabled the delineation of a sedimentary basin within the Block 11A area below the Lotikipi plain. The basin-fill is believed to be in excess of 5,000 m, well above the threshold for sufficiently buried and mature organic matter for oil generation.

Block 11A is in the vicinity of Blocks operated by one of the most prolific oil and gas explorers in Africa. Drilling activity in the area has made international headlines recently. The Eliye Springs well is in the adjacent Block 10BA while the Loperot and Ngamia-1 wells in Block 10BB are also nearby.

“Of major implication to the petroleum system in the Block 11A area, the Loperot well recovered light paraffinic oil sourced from an excellent type 1 oil-prone lacustrine shale,” said ERHC’s Geoscientist and Technical Adviser, Dr. Peter Kinyua Thuo, who has worked extensively in Kenya. “Even more important have been the significant oil columns encountered by the Ngamia-1 well.”

Apart from its new holdings in Kenya, ERHC has working interests in Chad, including the BDS 2008 and Manga Blocks and half of Chari-Ouest Block 3. The Company also holds working interests in six blocks in the Nigeria-São Tomé & Príncipe Joint Development Zone (JDZ) as well as 100% of Blocks 4 and 11 of the São Tomé & Príncipe Exclusive Economic Zone (EEZ) with an option to acquire up to 15% working interests in two other EEZ Blocks.

07/09/2012

 

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