Petroleum Africa
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Tuesday, January 21, 2014
Jacka Resources has received the necessary governmental approvals from Somaliland for the completion of its farm-out agreement with Sterling Energy. The farm-out agreement covers the Odewayne Block PSC, onshore Somaliland. Completion of the agreement is expected to occur in the coming days.
Under the terms of the deal, Sterling paid Jacka $3 million upon the signature of the agreement and associated documents. Jacka will also be paid an aggregate amount of up to $12 million by Sterling upon the achievement of operational milestones. These three milestones are linked to the minimum work program in the third and fourth periods of the PSC. Sterling will assume a 15% interest in the PSC from Jacka upon completion. Both Sterling and Jacka will be carried by the Odewayne Block operator, Genel Energy Somaliland Ltd., for the cost of all exploration activities during the third and fourth periods of the PSC, which ends in May 2016.
Jacka retains an option to increase its equity in this project by an additional 5% through its initial farm in from Petrosoma in March 2012. Sterling also completed a farm in to the Odewayne block through a deal with Petrosoma, in 2013.
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