Canadian oil and gas exploration company Africa Energy has entered into a farm-out agreement with a subsidiary of Pancontinental Oil & Gas to acquire a 10% participating interest in Petroleum Exploration License 37 offshore Namibia (PEL 37).
The company said on Tuesday that, under the terms of the agreement and similar to the terms of Pancontinental’s participating interest, the company’s participating interest share of all joint venture costs, including the drilling of the first exploration well on PEL 37, will be fully carried through the current exploration period by a joint venture partner.
Africa Energy has agreed to pay Pancontinental $1.7 million at close of the farm-out agreement, and an additional $4.8 million upon spud of the first exploration well.
Completion of the farm-out agreement is subject to receipt of all requisite government approvals, other regulatory approvals, third party consents, partner approvals, and finalization of due diligence procedures.
James Phillips, President and Chief Executive Officer for Africa Energy, commented, “The block contains a series of extensive base of slope fan prospects with significant combined resource potential. The fans directly overlie a mature oil-prone source rock of Aptian age, which was recently proven by the 2013 Murombe-1 and Wingat-1 wells in which the latter well recovered light oil. Africa Energy’s technical team has experience in these West African Cretaceous fan plays and we look forward to the drilling of a well in this play.”