Pancontinental Oil & Gas and its subsidiary Afrex in response to default notices received from FAR Limited has reached an agreement to settle this long standing matter with FAR. The amount which was the subject of the 2020 Default Notices totals US $567,145.80 Pancontinental will make a payment of US $150,000 into a nominated account of Operator Flow Energy (subsidiary of FAR) as full and final settlement of any and all outstanding cash calls relating to Kenya Block L6. The parties will then execute the Surrender and Termination Agreement, to start the process of exiting from Kenya L6.
KENYA Block L6 Onshore /Offshore Lamu Basin has PANCONTINENTAL ONSHORE 16%, OFFSHORE 40%. Block L6 covers 5,010 sq km with about one quarter onshore and the remaining offshore to 400 metres water depth. The Block lies in the Lamu Basin and within the Tana River delta, north of recent world-scale natural gas discoveries off the coasts of Mozambique and Tanzania.
Following encouraging hydrocarbon generation and migration studies, the joint venture is to explore the offshore portion of the licence area. A deep central graben in this area is considered to be oil and gas “source kitchen” and potential hydrocarbon trapping prospects have been identified adjacent to this area. According to an assessment by operator FAR Limited, the L6 area has potential to contain approximately 3.7 billion barrels of oil or 10.2 trillion cubic feet of gas prospective resources on a gross, un-risked, best estimate basis.
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