Africa Energy has acquired a 90 per cent participating interest in Block 2B, off the South African coast, at a cost of US$1 mn
The US$1 mn was paid to Afren, which went into administration last year in the wake of falling oil prices, and serious issues with corporate governance and debt. This was one of three transaction closed by Africa Energy to become the main stakeholder in the block. The company also paid US$2 mn and issued 14.8 mn new common shares of the company to acquire all the shares of Thombo Petroleum, a privately held company operating and holding a 34.5 per cent participating interest in Block 2B.
Africa Energy may be required to issue up to an additional 20 mn common shares and, at the option of the company, to either pay and/or issue up to $1.5 mn in additional contingent cash and/or shares if certain milestones are reached in regard to the commercialisation of Block 2B.
A farm-in agreement has been completed between Africa Energy with a subsidiary of Crown Energy to acquire a 30.5 per cent participating interest in Block 2B. Crown Energy will be reimbursed by Africa Energy for up to US$0.3 mn of net back costs and will fund costs for Crown's remaining 10 per cent participating interest associated with drilling and testing of the next well in Block 2B.