Taipan Targeting 1.6 Billion Barrels of Oil in Kenya

SOURCE: Commodity Dispatch / February 14, 2014 / Taipan Resources (TPN-TSX.V) announced that the total estimated Mean Gross Unrisked Prospective Resource on Block 2B in Kenya has increased by 388% from 410.4 million-barrels-of-oil-equivalent (MMBOE) to 1,593 MMBOE.

Taipan is an independent, Africa-focused oil exploration company with interests in Block 1 and Block 2B onshore Kenya.

The independent assessment of Block 2B was carried out in accordance with 51-101 Standards of Disclosure for Oil and Gas Activities.

The Pearl-1 prospect, expected to be drilled later this year, has an estimated Mean Gross Unrisked Prospective Resources of 251 MMBOE.

Premier Oil plc is carrying Taipan through the cost of the work program for the First Additional Exploration Period on Block 2B. This includes the drilling and testing of the Pearl-1 prospect. Taipan holds a 45% interest in Block 2B and is the operator during the exploration phase with Premier having the right to assume operatorship of any development.

Premier Oil is a leading FTSE 250 independent exploration and production company with interests in the North Sea, South East Asia, the Middle East, Africa, Pakistan and the Falkland Islands.

Premier Oil’s portfolio of oil and gas assets delivered production of approximately 58,000 barrels of oil per day (boepd) in 2013, and it has various projects in the development phase which should increase production to over 100,000 boepd in the medium-term.

Premier became active in Kenya in 2011 with the signing of two PSCs for offshore exploration blocks L10A and L10B.

On February 3, 2014 Taipan announced that it had commenced the acquisition of further 2D seismic data on Block 2B, onshore Kenya. The data is being used to finalize the drilling location for the Pearl-1 prospect.

An independent contractor is providing an additional 178.75 km of 540 fold 2D seismic data. The seismic program is expected to be completed by the end of February.

"The Pearl-1 exploration well will target a Tertiary prospect that is in a similar geological setting to Tullow's Ngamia, Twiga, Ekales, Agete and Amosing discoveries,” stated Taipain CEO Mr. Maxwell Birley, “The Anza Basin is one of the largest Tertiary-age rift-basins in the East African Rift systems that together contain multi-billion barrel oil discoveries. We believe that the 'sweet spot' of the Anza Basin is located on Block 2B."

In addition to Taipan’s 45% working interest in Block 2B (1.35 million acres/5,464km2), TPN holds a 20% working interest in Block 1 (5.497 million acres/22,246 km2) which is operated by East Africa Exploration, a subsidiary of Afren plc.

According to a February 12, 2014 Bloomberg article, “Kenya, East Africa’s largest economy, may become the region’s first exporter of oil as soon as 2016, leapfrogging neighboring Uganda. “Tullow Oil (TLW.LSE), which found Kenya’s first crude, said the East African nation considers the start of production and exports as a ‘national priority’.”

Africa Oil (AOI-TSX) and Tullow are working with the Kenyan government to construct and export pipeline.

“They see it as a project of national priority and they are very focused on getting first oil from Kenya as soon as practical, but doing it properly,” states Tullow Chief Operating Officer Paul McDade in the Bloomberg article, “They [Kenya] recognize that the pipeline from northern Kenya to the coastline is the critical path, and they are in a strong dialog with us.”

Kenya’s has a population of 41 million with a high percentage of well-educated English-speaking multi-lingual professionals. Almost 70% of the population under the age of 35.

Kenya is currently the world’s top onshore oil exploration area. There is an estimated 22.7 billion barrels gross un-risked prospective resources. The region is still largely unexplored. Only 58 wells have been drilled in Kenya. There are 20 wells planned in 2014. Taipan is the 4th largest gross acreage holder in Kenya.

Taipan management has discovered over 3.75 billion barrels of oil equivalent in similar early stage basins with success rates up to 80%.

In Premier Oil, Taipan has a senior partner with $180 million cash on hand, fully invested in the success of Block 2B in Kenya.

TPN stock surged 25% on the news of the 388% increase to the Unrisked Prospective Resource on Block 2B. It is currently trading at .32 with a market cap of $27 million.