Centric Energy Corp.

Centric Energy Corp.

January 28, 2010 15:03 ET

Centric Energy Signs Kenyan Production Sharing Contract and Announces Non-Brokered Private Placement

LONDON, ENGLAND--(Marketwire - Jan. 28, 2010) - Centric Energy Corp. ("Centric Energy" or "the Company") (TSX VENTURE:CTE) is pleased to announced that it has signed a Production Sharing Contact (the "PSC") with the Government of the Republic of Kenya for Block 10BA located in the northern part of the Rift Valley Province of Kenya, and covering part of the East African Rift system.

The PSC was officially signed in a ceremony in Nairobi, on January 27th, 2010, by the Honourable Kiraitu Murungi, Minister for Energy of the Republic of Kenya, and Alec Robinson, President and CEO of Centric Energy.

"Block 10BA is a very exciting new exploration opportunity for Centric Energy," said Alec Robinson, "and we look forward to working closely with the Kenyan authorities, using modern exploration technology to rigorously explore for hydrocarbons in the Block."

The PSC is split into a seven-year exploration term, with three periods, and a 25-year production term. In the first three-year exploration period, Centric Energy will re-process and study existing data and conduct geophysical and geological surveys including gravity and magnetic surveys, and will acquire new 2D seismic. The optional second and third periods are of two years each and include obligations for the acquisition of 2D and 3D seismic and the drilling of exploration wells.

Centric Energy's Block 10BA is strategically located within the East African Rift System which is enjoying increasing exploration interest and significant recent success, most notably in the Albertine rift in Uganda, 660 km to the west which is considered to be the closest geological analog to the Tertiary basins underlying Block 10BA. Heritage Oil PLC (HOIL.L) and Tullow Oil PLC (TLW.L) have discovered major volumes of hydrocarbons in the Albertine rift, currently estimated to be more than 1 billion barrels recoverable.

Block 10BA is relatively under-explored, with the most recent seismic data acquired in 1991. It covers 16,205 square kilometers (over 4,000,000 acres) in a part of the Rift System that includes portions of several Tertiary-age rift sub-basins, including the Kerio and Turkana basins and the northern part of the Lodwar basin. The Loperot-1 well was drilled by Shell Exploration (Kenya) in 1992 in the southern part of the Lodwar basin, 75 km to the south of Block 10BA, and encountered oil shows and mature source rocks, demonstrating the presence of a petroleum system (source: Kenya National Oil Corporation).

In addition, further exploration opportunities and upside potential are provided by the Cretaceous-age Anza Graben, which underlies the northern part of Block 10BA. A deep exploratory well is currently being drilled by CNOOC (China National Offshore Oil Corporation) in the southern part of the Anza Graben to the southeast of Block 10BA.

An independent assessment of the prospective resources of Block 10BA has been completed by Gustavson & Associates under a Resources Evaluation Report prepared in accordance with National Instrument 51-101 – Standards for Disclosure for Oil and Gas Activities. This report calculates prospective resources for 25 prospects in the Block. The total of the prospective resources ranges from a low case (P90) of 955 million BOEs(i) up to a high case (P10) of 4,379 million BOEs(i), with a best estimate (P50) of 2,188 million BOEs(i). The January 1, 2010, report entitled "Resource Evaluation Report, Centric Energy Corporation, Kenya Block 10BA" will be filed on SEDAR and will be accessible from Centric's website at www.centricenergy.com. See definition of "prospective resources" below.

The Company acquired the rights to be granted the concession 10BA Production Sharing Contract from an arm's length party introduced to the Company and has agreed to pay, subject to receipt of final approval from the TSX Venture Exchange, a total of US$615,000 in acquisition costs and finder's fees.

The Company also announces its intention to carry out a non-brokered private placement of up to 18,750,000 units at a price of C$0.08 per unit for gross proceeds of up to C$1,500,000. Each unit will consist of one common share and one common share purchase warrant. Each common share purchase warrant will be exercisable to purchase one additional common share at a price of C$0.12 per common share for a period of 2 years subject to the Company's right to accelerate the exercise of the common share purchase warrant if the daily volume weighted average trading price of the common shares of the Company on the TSX Venture Exchange is equal to or exceeds C$0.20 per common share for a period of 10 consecutive trading days between the period that is four months following Closing and the expiry of the common share purchase warrants.

The proceeds of the private placement, will be used by the Company to fund the costs associated with the initial 12 month exploration work program on Block 10BA, required under the Production Sharing Contract, and for general working capital.

The Private Placement and any finder's fees that may be payable, will be subject to TSX Venture Exchange approval.


Alec Robinson, President and Chief Executive Officer

(i) BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 MCF : 1 bbl is based on energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the wellhead.

Prospective resources are defined as "those quantities of oil and gas estimated on a given date to be potentially recoverable from undiscovered accumulations. They are technically viable and economic to recover." Note that the estimated prospective resources disclosed in this news release could be oil or gas and that the estimate does not include consideration for the risk of failure in exploring for these resources. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

This News Release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to a U.S. Person unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Forward-Looking Statements:

This press release includes "forward-looking statements" including forecasts, estimates, expectations and objectives for future financing and exploration activities that are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Statements regarding future exploration activities and capital expenditures are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, inflation or lack of availability of goods and services, environmental risks, drilling risks and regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. Statements regarding anticipated financing activities are subject to all the risks and uncertainties normally associated with fundraising by public companies. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. The Company does not assume the obligation to update any forward-looking statement except as required by applicable law.

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Centric Energy Corp.
    Alec E. Robinson
    Toll Free: +1 (800) 962-7189 or +44 207 222 8512