Kennedy made the shareholders of Associated Gold Fields very happy after steering the Ghana-focused junior explorer into an on-market takeover by Resolute Samantha in the mid 1990's.

This time, Pancontinental and Afrex Ltd, where Mr Kennedy is also a director, have reached an agreement with the Kenyan Government for three shallow, onshore/offshore blocks considered to be highly prospective. The blocks, designated L6, L8 and L9 have a total area of 21,400 sq.km and represent the majority of Kenya's near-shore territorial waters.

PanCon CEO, Andrew Svalbe, said the deal took about nine months to cement.

"I've worked a lot of those areas before in my 13 years working with Esso. I knew there was a lot of very prospective acreage in the East African region."

The Production Sharing Contracts, Pancon (40%) and Afrex (60%), will grant exclusive right to the companies to explore the areas after the completion of formalities, scheduled to be concluded next month. Pancontinental said the strata has the potential to contain significant hydrocarbon due to its similarities with offshore Songa-Songa gas field in neighbouring Tanzania.

Svalbe said most of East Africa had no indigenous oil and gas production, and Songa was the first development in the region.

"The political situation has quietened down a lot in the last 10 years. We feel comfortable going there. The local economies are starting to grow again - there is an instant market in the event of a discovery," he said.

Afrex is steered by Barry Rushworth and is based in London. Svalbe said the plan was to list the company on the AIM or second board of the London Stock Exchange in the next six months.