Orca Exploration has given more time to Swala Energy to complete the second and third closing of the previously announced $130 million acquisition of a stake in Orca’s PAE Pan African Energy.
Orca said on Monday that Swala Oil & Gas must close its investment PAE PanAfrican Energy Corporation by June 29.
The company added that there were no assurances that one or more of the transactions would be completed by June 29 or that they would be completed on the terms previously disclosed.
According to the agreement between the two companies, Tanzania’s Swala Oil and Gas will buy up to a 40 percent stake in PAE PanAfrican Energy Corp. for $130 million.
When completed, the investment will give Swala part ownership of PAE’s Tanzanian subsidiary, which owns exploration and production rights for in the Songo Songo block. PAE Tanzania holds the block in partnership with the Tanzania Petroleum Development Corporation.
The initial negotiations between the two companies were officially revealed back in August 2017, and then, in January 2018, Swala announced the financial terms and the payment of the first $25 million tranche.
Swala then said it was going to approach Tanzanian, East African, and international investors for a second tranche fundraising via a new Tanzanian bond and additional tapping of the 144A USD bond.
Commenting on the extension on Monday, David Mestres Ridge, Swala CEO, said: “The new extension is not a reflection of lack of interest, which remains strong both nationally and internationally, but of certain aspects of the listing approvals process. Having identified these issues the Company has taken steps to ensure that no further delays are incurred as a result, and shall advise the market as the process progresses.”
This is the second extension granted by Orca, following the first extension in early April.
Through its subsidiaries, Orca operates one license in Tanzania which comprises two blocks. The blocks are located in shallow water approximately 15 kilometers off the coast and 200 kilometers south of Dar es Salaam.
The Songo Songo gas field within the license is positioned on and slightly offshore the Songo Songo Island. The main reservoir is developed in Lower Cretaceous aged Neocomian to Albian sandstones, while Upper Cretaceous aged Cenomanian sands that lie unconformably on the Lower Cretaceous will provide an additional reservoir when developed. The field first started production in 2004.