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Wednesday, June 25, 2014
The deal between Swala Energy and Cepsa that has Swala farming down a 25% working interest in Kenyan Block 12B is now complete. The deal was originally announced in mid-March and was subject to certain conditions that included the consent of the Kenyan government and the Competition Authority of Kenya. These consents have now been received and the farm out agreement has been finalized and is unconditional.
Swala retains a 25% net working interest in the block, Cepsa will own a 25% net working interest, and Tullow Oil holds the remaining 50% and will continue as operator of the block. As part of the farm-out agreement Swala will have its past costs repaid and be free carried through the first two exploration wells if CEPSA decides to participate, up to a maximum of $7.5 million for each one. As previously announced the 2D seismic program over parts of Block 12B began April 23.
Swala CEO Dr. David Mestres Ridge said: “I would like to again welcome Cepsa, a company of sound financial and technical standing to the Kenya Block 12B JV. Completion of this farm-in agreement will now allow the Company to focus its resources on existing operated assets and the continued growth of the Company’s portfolio.”
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