Jun 11 - Origin and Apache Complete Agreement for Offshore Kenya Exploration

Source Press Release
Company Origin Energy LimitedApache Corporation 
Tags Deals, Upstream Activities
Date June 15, 2011

Origin Energy Limited, on behalf of its wholly owned subsidiary Origin Energy Kenya Pty Ltd ("Origin") advises that it has completed an agreement with a subsidiary of US independent Apache Corporation (NYSE and Nasdaq: APA) ("Apache"), to divest a 50 per cent interest in a Production Sharing Contract (PSC) for petroleum exploration and production, pertaining to Block L8 located in the Lamu Basin, offshore Republic of Kenya.

Under the terms of the agreement Origin has been reimbursed historical costs of US $13.2 million and Apache has become operator. In addition, Apache will meet a component of Origin's costs of an initial exploration well to be drilled in Block L8, on the Mbawa structure. The schedule for exploration activity has yet to be determined

Commenting on this agreement, Origin's Executive General Manager, Geoscience & Exploration New Ventures, Dr Rob Willink said, "Origin is pleased to have completed this transaction with Apache. The joint venture has agreed to go forward with exploration drilling, with Apache as operator bringing its expertise to that endeavour."

Offshore East Africa at large has become an industry focus for exploration as a result of recent deepwater discoveries offshore Tanzania and Mozambique. Block L8 comprises 5,123 square kilometres with attractive exploration opportunities that include several large objectives. Prospectivity of the block centres on the Mbawa structure, a large but complexly faulted anticline mapped on 3D seismic data with potential for both oil and gas at inferred Cretaceous and Jurassic reservoir levels.

As a result of this transaction the interest holders in PSC Block L8 will become:

Apache   50%  
Origin Energy Kenya Pty Ltd   25%  
Pancontinental Oil & Gas NL / Afrex Ltd *^    25%  
 


*Afrex Ltd is a wholly owned subsidiary of Pancontinental Oil & Gas NL.
^Pancontinental Oil & Gas NL announced on 1 June 2011 an agreement to farm-out a 10% interest to Tullow Kenya BV (a wholly owned subsidiary of Tullow Oil PLC). 

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom, Australia and Argentina.

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