26 September 2005
EastCoast Energy announces Tanzanian farm-in
TORTOLA, British Virgin Islands -- EastCoast Energy Corporation ("EastCoast Energy" or the "Company") announces that it is expanding its asset base in Tanzania and has negotiated an agreement with Aminex plc to farm-in to its offshore Nyuni Production Sharing Agreement ("Nyuni PSA") adjacent to the producing Songo Songo natural gas field. The transactions will require formal approval of the Tanzanian authorities.
Under the agreement, the Nyuni PSA will be divided into two areas, "A" and "B". Area "A" will consist of the western portion of the PSA. Area "B" will cover the balance of the PSA area and will include the Nyuni prospect that was drilled by Aminex plc and partners in 2003 with reported oil shows.
"This is the right time for EastCoast Energy to expand. Demand in Tanzania for natural gas is strong and we can foresee regional gas demand exceeding the currently producing Songo Songo reserves in future years", said Peter Clutterbuck, President and Chief Executive Officer of EastCoast Energy. "In the meantime, we are successfully building gas sales and infrastructure and we hae our own seismic exploration programme underway. We recently reprocessed and reinterpreted seismic over the Songo Songo region, boosting our confidence in the area's overall potential."
EastCoast Energy plans to take advantage of the cost savings to be gained by extending its current Songo Songo area 2D seismi program onto the adjacent Nyuni PSA farm-in lands in Q4 2005. Should the area be developed for production in future, infrastructure is available and can be readily expanded. This makes the farm-in venture a lower risk, higher upside opportunity than other gas prospects in Tanzania. The parties have agreed that any discovery would be developed jointly with Aminex and operated by EastCoast Energy.
Under the farm-in agreement, EastCoast Energy will undertake, at its own cost, between 150 and 300 kilometres of 2D seismic over Area "A" in October 2005 in conjunction with its 550 kilometres seismic acquisition programme on its Songo Songo license area. Upon completion of the seismic acquisition, processing and interpretation, the Company will be required to elect whether or not to participate in an exploration well in Area "A" which has to be spudded by November 2007. If the Company so elects then, subject to certain terms and conditions, it will pay 64% of the costs of that well to earn a total aggregate 50% interest in Area "A".
The farm-in agreement was signed between EastCoast's subsidiary, PanAfrican Energy Tanzania Limited and Ndovu Resources Limited, a wholly-owned subsidiary of London listed Aminex plc (LSE symbo: AEX.L).
EastCoast Energy Corporation is a TSXV listed company focused on the production of Tanzanian natural gas and the sale of "Additional Gas" to markets in East Africa. The Company was spun out from PanOcean Energy Corporation and began trading on the TSXV as a separate public company on 31 August 2004 under the trading symbols ECE.SV.B and ECE.MV.A. The company is headquarted in Tortola, British Virgin Islands and maintains its operations offices in Dar es Salaam, Tanzania.
Forward Looking Statements
This disclosure contains certain forward-looking estimates that involve substantial known and unknown risks and uncertainties, certain of which are beyond EastCoast's control, including the impact of general economic conditions in the areas in which EastCoast operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with oil and gas operations, therefore EastCoast's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking estimates and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking estimates will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, that EastCoast will derive therefrom.
For further information please contact:
Peter R. Clutterbuck, CEO
+44 (0) 7768 120727
Nigel A Friend, CFO
+255 (0)22 2138737