Pancontinental Oil & Gas has completed a farmout of part of its interest in Kenyan licence L8 to Tullow Kenya, a wholly owned subsidiary of Tullow Oil.

Under the agreement, Tullow will farm in a 10% interest in the licence that contains the giant Mbawa Prospect while Pancontinental will retain a 15% stake.

Tullow will have an option to earn a further 5% by providing funding on its own and on Pancontinental's behalf after the first earning phase.

In the first phase of the farmout, Tullow will undertake drilling of the Mbawa prospect.

The Kenya L8 consortium will now consist of operator Apache Corporation with a 50% stake, Origin Energy with 20% and Pancontinental Oil & Gas and Tullow Kenya with 15% each.

Tags: Pancontinental Oil & Gas NL