Cove Energy Posts 2010 Results (UK)


Cove Energy plc, the independent oil and gas exploration company, today announced its final results for the 12 month period ended 31 December 2010.

2010 Highlights

Mozambique Rovuma Offshore Area 1

Drilling success – Three major gas discoveries, oil encountered:

·Windjammer (555 ft net gas pay) · Barquentine (416 ft of net gas pay)

· Lagosta (550 ft of net gas pay).

· Ironclad well encounters oil ·

Validation of seismic model

Commercialisation/Contingent Gas Resources

·Combined gas resources sufficient to support monetisation through Liquefied Natural Gas (LNG) development.

· Contingent Gas Resources for combined Windjammer/Barquentine/Lagosta (Palma Gas Area) discoveries estimated to be 12 TCF (Pmean).

New Ventures

· Acquired 15% interest in 5 contiguous deepwater blocks offshore Kenya


Successful equity funding combined with significant capital appreciation

· £136 million ($210 million) raised in new equity

2011 – Year to Date – Highlights

· Tubarao Gas Discovery (110 feet net gas pay)

– Contingent Gas Resources in excess of 1 TCF (Pmean).

· Cove recognise the potential for substantial additional upside resource potential to the Palma Gas Area and Tubarao discoveries based on new interpretation of existing seismic and well data

· Circa 4,000 sq km new 3 D seismic programme underway in Rovuma Offshore

· Commitment to 2 deepwater rigs for Q4 2011 for exploration, appraisal and testing in Rovuma Offshore

· Appraisal programme of Palma Gas Area of Rovuma Offshore commenced. Extensive coring programme at Windjammer discovery completed, rig now at Lagosta wellsite.

· LNG Development planning underway

· Interest acquired in 2 further blocks offshore Kenya

Results for Year

The Group’s loss for the year was US$5.0 million (2009:US$1.6 million) Production revenue from Cove interests in Mnazi Bay yielded a revenue of US$0.36 million (2009: $Nil). Administrative expenses of US$5.8 million were incurred during 2010 (2009: US$1.7 million), including a non-cash charge in respect of share based payments of US$2.2 million (2009: US$1.0 million).

Michael Blaha, Chairman of Cove commented,

2010 was a remarkable second year for Cove in which the company transformed the assets that we acquired in 2009 from Artumas with world class exploration successes that added significant contingent gas resources that is to form the basis for a significant LNG project. In addition Cove has expanded its portfolio with some strategic exploration positions in 7 deep and shallow water blocks in Kenya. In our strategy we remain focused on geology in emerging basins with intensive exploration and appraisal programmes executed by competent operators. We have established ourselves as a reliable company that is focussed on creating shareholder value on the basis of a very clear strategy.

Cove’s participation in the Rovuma Offshore Area 1 gas discoveries has positioned the Company in a leading LNG project. The Rovuma Offshore Area 1 partnership has commenced an aggressive appraisal, development and commercialisation programme; which aims for investment sanction of the LNG project in Q3 – 2013. We continue the exploration programme on the numerous high priority oil and gas targets which will be supported by the additional 4,000 sq km 3D seismic that will be integrated with the existing 3,000 sq km 3D seismic. We aim to search for additional gas resources to support an ever expanding LNG project and we are hopeful of discovering an oil resources in the south following the oil encountered in Ironclad well during 2010.

I and the Cove Board are confident that the combined exploration and appraisal programmes, currently underway on our East Africa portfolio, will achieve continuing significant growth for shareholders in what promises to be an exciting future.

Finally I am grateful for all the support that was given to us by our consultants, advisors and my colleague directors. This group of people has formed a nimble “fit-for-purpose” and professional team. Without this team we could not have achieved today’s tremendous position in a period of under two years since the company was initiated.”


Source: Cove Energy, May 23, 2011;