Petroleum Africa
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Tuesday, May 30, 2017
Otto Energy’s subsidiary, Otto Energy (Tanzania), and Swala Oil and Gas (Tanzania) have reached a settlement and other commercial arrangements in respect of the various claims and disputes concerning both the Pangani and Kilosa-Kilombero licenses onshore Tanzania.
Under the settlement of the claims and counter-claims concerning the Pangani License, including the claims made before the Federal Court in Australia, Swala shall pay to Otto a net sum of $800,000 on or before August 31. Upon receipt of such payments, the proceedings, including that against current and former directors of both Swala and Swala Energy, will be discontinued.
The settlement has been reached on commercial grounds and does not represent an admission of liability by either party.
In respect of the various disputes between Otto and Swala in relation to the Kilosa-Kilombero License, the parties have agreed upon Otto’s withdrawal from the JOA and that Otto shall pay third party creditors a total sum of $249,016. Swala has assumed the rights and obligations in respect of Otto’s 50% participating interest.
Swala and Otto have entered into a royalty agreement under which Swala has granted to Otto a gross overriding royalty equal to 2% of revenue derived from Otto’s former interest.
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