Africa Energy, an oil and gas company with exploration assets offshore South Africa and Namibia, has announced the execution of two farmout agreements
The company will transfer an aggregate 62.5 per cent participating interest in the exploration right for Block 2B offshore South Africa in consideration for a carry through the next exploration well, Gazania-1, which is expected to spud by the end of 2020. Africa Energy will retain a 27.5 per cent participating interest in Block 2B.
Garrett Soden, Africa Energy’s president and CEO, commented, “Block 2B has the A-J1 oil discovery from 1988 in shallow water close to shore with significant contingent and prospective resources. The Gazania-1 well will target a relatively low-risk rift basin oil play up-dip from the discovery. We look forward to working with our new partners Azinam and Panoro to prove up more resource offshore South Africa.”
Under the terms of a farm-out agreement entered into with a subsidiary of Azinam Limited, a wholly-owned subsidiary of Africa Energy, will farmout a 50 per cent participating interest and transfer operatorship in Block 2B to Azinam. In consideration for the assignment of this interest, Azinam will pay Africa Energy US$0.5mn at close and a disproportionate amount of the Gazania-1 exploration well and other joint venture costs.
Azinam paid a US$1.5mn deposit to Africa Energy at the signature of the Azinam Farmout Agreement and will place an additional amount into escrow at close to support its obligations under the Azinam Farmout Agreement. Azinam is a private Southern Africa-focused oil and gas exploration company backed by Seacrest Capital. Azinam is part of a group of upstream oil and gas companies with extensive operating experience, including drilling multiple wells in the North Sea.
Under the terms of a farmout agreement entered into with a subsidiary of Panoro Energy, a wholly-owned subsidiary of Africa Energy will farmout a 12.5 per cent participating interest in Block 2B to Panoro. Panoro is an Africa-focused independent oil and gas exploration and production company listed on the Oslo Stock Exchange.
Africa Energy currently holds a 90 per cent participating interest and is the operator of Block 2B. Crown Energy indirectly holds the remaining 10 per cent participating interest. Closing of the farmout transactions is subject to standard conditions for a transaction of this type, including approval by the South African government.
