Dominion Petroleum investors set for ‘significant benefit’ in exciting East African deepwater play

Investors in Dominion Petroleum (LON:DPL) are set to gain a significant benefit from their position as stakeholders in the exciting East African deepwater play, according to chief executive Andrew Cochran.

This morning in the group’s interim results, for the six months ended June 30, Dominion reflected on what it described as an ‘eventful first half’.

During the period it expanded its East African offshore acreage significantly, adding Kenyan licences to its existing assets in Tanzania. However a plan to raise US$50 million through a placing and earn a stake in prospective Maltese assets was shot down by certain investors at a vote in July.

"Dominion has had an eventful first half of 2011.  Most notably, it has added exciting acreage with the acquisition of Blocks L9 and L15 offshore Kenya,” chief executive Cochrane said.

“We believe that this combined with our existing portfolio, on- and offshore East Africa, will attract industry interest and allow us to retain a sizable portion of upside in these highly prospective blocks.

"The failure of the resolutions at the SGM in connection with Dominion's plans to strengthen its balance sheet and expand its operations was clearly a disappointment for the Board and the majority of Dominion's shareholders who had voted in favour of them. 

"Even with this disappointment, with Blocks L9 and Block L15 now added to its portfolio of exploration assets in offshore East Africa, Dominion holds a leading exploration portfolio in the deepwater East African margin with its three blocks in Tanzania and Kenya.”

The newly added Kenyan PSC's are contiguous to blocks operated by significantly larger operators, Dominion highlighted, and successful drilling has already taken place on these blocks. The company initially plans to carry out seismic exploration across these blocks.

Meanwhile in Tanzania Dominion said it has made significant progress in advancing Deepwater Block 7, with additional mapped prospects estimated between 1.3 and 6.5 trillion cubic feet (P90 to P10).

At the end of the period Dominion had US$10.7 million in cash. To advance these deep water targets through drilling Dominion will have to bring in a major partner, for both technical expertise as well as financial backing.

"Clearly there is work to be done, but the directors anticipate that the expanded, combined portfolio will gain even more industry interest going forward,” Cochrane said.