London-listed Tullow Oil has agreed to buy Calima Energy’s interest in the Namibia offshore PEL 90 license (Block 2813B) in the Orange Basin for $2 million plus bonuses that count add further $10 million.
Calima, listed on the Australian Stock Exchange, was awarded a petroleum agreement for offshore Block 2813B in the Orange River Basin off Namibia in May 2018, following an application to the Government of Namibia.
Announcing the agreement with Tullow on Thursday, Calima said the parties agreed to a 60-day exclusivity period to enable the satisfaction of certain industry standard conditions precedent, which include; entering into a formal sale and purchase agreement, customary due diligence, Tullow board approval and Government and partner approvals relating to the assignment of interest and transfer of Operatorship.
“Calima will receive US$2.0 million on completion. Success bonuses totaling $10.0 million will be paid in two equal tranches (US$5.0 million) following the grant of a production license and then upon the commencement of commercial production,” Calima said.
Alan Stein, Calima’s Managing Director said: “With recent drilling success in the Montney this transaction allows us to focus capital allocation towards Canada while maintaining financial leverage to exploration success in Namibia. The Namibian block is a world-class exploration play with extraordinary upside but it will require considerable investment and time to reach the point of exploration drilling.
“The Montney offers our shareholders a significant value proposition in the short term where the Company can now put in place the building blocks of a world-class development with modest capital investment. We wish Tullow and our Namibian partners every success in Block 2813B.”
Calima is the operator of the block with a 56% stake. The other partners are Trago Energy 20%, Harmattan Energy Ltd 14%, NAMCOR 10%.
As per the 2018 terms, the agreement for the offshore block, which covers an area of 5,344 km2, had an initial investment term of four years. During the first year of the initial term, Calima had committed to evaluating the existing data in, an around, the block.
Over the four years of the initial term, Calima had committed to acquire 2D or 3D seismic data and undertake a detailed prospectivity review. This will now be done by Tullow.
While the year 2018 was not fruitful when it comes to offshore exploration in Namibia, as Tullow and Chariot’s wells Cormorant and Prospect S, came up dry, Namibian offshore acreage holders will be closely watching at France’s Total and its Venus well in Namibia’s ultra-deep offshore that is expected to be spud later this year.
According to a report by Wood Mackenzie, the ultra-deepwater wildcat will target 2 billion barrels of oil in a giant Cretaceous fan play, close to the South African maritime boundary. Rystad Energy, a Norwegian energy intelligence firm, has said that the Venus will be the deepest well ever drilled in Africa, and is considered to be the largest prospect ever in Namibia.
Offshore Energy Today Staff
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