2010-09-29-2010-09-28

Entered farm-in to acquire 50% WI in Block 10BA in NW Kenya.

Tullow Oil Plc, London, (London: TLW) has entered a farm-in and joint operating agreement with Centric Energy Corp. (Toronto Venture: CTE) in a production-sharing contract in Kenya.

Tullow will acquire a 50% interest in a contract covering Block 10BA in northwestern Kenya, which is within the East African Rift System. Major volumes of hydrocarbons have been discovered by Tullow Oil in the Albertine rift, currently estimated to be approximately 950 million barrels recoverable as stated in the press release issued by Tullow on July 28.

Tullow will earn the interest by reimbursing 50% of Centric Energy's acquisition costs for the contract which total approximately US$750,000, paying 80% of the first US$30 million of expenditures; and assuming 80% of the bank guarantees and parent company guarantees during the period in which it is paying 80% of the expenditures.

Centric president and chief executive Alec Robinson says, "Centric Energy is very pleased to have the opportunity to work with Tullow Oil on the exploration of Block 10BA. Tullow's success and expertise in a similar geological setting in Uganda will ensure that Block 10BA is explored using the most modern exploration technology and in accordance with recognized international environmental standards and principles."

In addition to the approval of the Kenyan government, another condition of the the closing is the resolution of a judicial review application filed against Kenyan Ministry of Energy relating to certain exploration permits granted by the ministry, including the company's contract.

Court proceedings were brought by Interstate Petroleum Ltd. against the Permanent Secretary, Ministry for Energy whereby Interstate is seeking a judicial review of the administrative process that led to the issuance of exploration permits in respect of Block 10BA. A preliminary order, granting IPL leave to seek orders against the Permanent Secretary, has been granted and a hearing date has been set for Oct. 27.

Centric Energy has been advised by its legal counsel in Kenya that the courts in Kenya regularly grant this sort of preliminary order, also known as "granting leave," in applications of this nature as there is no requirement to establish the merit of the claim on the initial application.

The Ministry of Energy has advised Centric that it can carry on with its work program and that its contract remains in good standing.

Robinson says, "Centric Energy believes there is no basis for the claims that IPL is making against the Permanent Secretary. We understand that both the Permanent Secretary and the Ministry of Energy share our view in that regard. Centric Energy will work closely with the Permanent Secretary, the Ministry of Energy, the Attorney General's office and other interested parties to ensure that our interest in the Block is safeguarded."