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Wednesday, November 22, 2017
Africa Energy signed a definitive agreement to acquire an effective 4.9% interest in a block in South Africa. The agreement gives the company access to Block 11B/12B offshore the country in the Outeniqua Basin.
The block lies approximately 175 km off the southern coast of South Africa and covers around 19,000 sq km in water depths ranging from 200 to 2,000 meters.
Total E&P South Africais the operator and has a 50% interest in Block 11B/12B. CNR International (CNRI) holds the remaining 50%.Africa Energy holds 49% of the shares in a new special purpose vehicle, Main Street 1549 Proprietary Limited, which has entered into farm-out agreements with Total and CNRI separately to acquire 5% from each for an aggregate 10% participating interest in Block 11B/12B (4.9% net to Africa Energy).
Africa Energy paid a deposit of $0.49 million at signature and will pay an additional $6.86 million at closing. The company has agreed to fund a portion of Total and CNRI’s costs for the proposed exploration well to a maximum of $7.55 million, plus certain contingent payments due at various milestones associated with commercialization of hydrocarbons from Block 11B/12B. The closing, carry and contingent payments will be funded from cash on hand and/or from third party sources.
Garrett Soden, Africa Energy’s President and CEO, commented, “We are excited to partner with Total and CNRI on Block 11B/12B. This is a unique opportunity for a company of our size to work with majors in what we believe to be the most prospective geology offshore the African continent. Our technical team knows the area well from their previous exploratory work off the southern coast, and we look forward to the proposed exploration well on Block 11B/12B.”
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