Kenya

Pancontinental has enjoyed a long and successful relationship with the country of Kenya.

The Company was granted various licences and signed Production Sharing Contracts as early as 2002. Since then, Pancontinental has been actively involved in the exploration, evaluation, seismic and drilling programmes of its licences. This long association with Kenya has been advantageous to Pancontinental in securing high quality international joint venture partners in a number of its projects.

The stable legal and fiscal regimes of Kenya, combined with Pancontinental’s strong acreage position, place the Company very favourably in the East African region. Offshore East Africa has become an industry focus through recent major deepwater gas discoveries offshore Tanzania and Mozambique. Offshore exploration work is being aggressively pursed by a number of major international companies such as BG Group, Tullow, Total, ENI and Anadarko; some of these are Pancontinental’s partners through farmin and in new projects.

The Company participated in the first-ever discovery, the L8 Mbawa gas discovery in September 2012. The Mbawa Gas Discovery and recent oil shows elsewhere while drilling have established the existence of oil and gas systems. While a number of oil discoveries have recently been made onshore, Kenya itself has no indigenous oil or gas production.

Pancontinental’s Strategy Offshore Kenya

Pancontinental has identified a major oil and gas play offshore Kenya and as such, has acquired interests in three licence areas; L6, L10A and L10B.

The Company entered Kenyan offshore exploration as a result of having identified the oil potential in the restricted depositional environment in the Tana River Delta as per below.

Pancontinental believes that the prime areas to develop good oil source rocks, and to have these fully mature to generate oil, is the restricted environment where the Tana River Delta carried sediments and nutrients into the deep trough inboard of the Davie Walu Ridge.

The Company has extended it strategy of exploring for oil to the south of the L6 block by acquiring the L10 blocks in 2011. These blocks cover the same deep Tertiary troughs that the Company interprets to be oil-generating in L6. The Mbawa discovery establishes the existence of a working hydrocarbon system offshore Kenya. The source material of the gas is interpreted to be a thermally mature mixed gas and oil-prone source and this meas that oil may also have been generated.

Pancontinental has participated in five 3D surveys offshore Kenya and these have generated numerous Prospects and Leads as per below.