VANCOUVER, Feb. 25, 2020 /CNW/ - Africa Energy Corp. (TSX Venture: AFE) (Nasdaq First North: AEC) ("Africa Energy" or the "Company"), an oil and gas company with exploration assets offshore South Africa and Namibia, is pleased to announce the execution of two farmout agreements whereby the Company will transfer an aggregate 62.5% participating interest in the Exploration Right for Block 2B offshore South Africa in consideration for a carry through the next exploration well, Gazania-1, which is expected to spud by the end of 2020. Africa Energy will retain a 27.5% participating interest in Block 2B. View PDF Version
Garrett Soden, Africa Energy's President and CEO, commented, "We are excited to farmout part of our interest in Block 2B and add a carried well to our very active and potentially transformational 2020 drilling program. Block 2B has the A-J1 oil discovery from 1988 in shallow water close to shore with significant contingent and prospective resources. The Gazania-1 well will target a relatively low-risk rift basin oil play up-dip from the discovery. We look forward to working with our new partners Azinam and Panoro to prove up more resource offshore South Africa."
Under the terms of a farmout agreement entered into with a subsidiary of Azinam Limited ("Azinam"), a wholly-owned subsidiary of Africa Energy will farmout a 50% participating interest and transfer operatorship in Block 2B to Azinam (the "Azinam Farmout Agreement"). In consideration for the assignment of this interest, Azinam will pay Africa Energy US$0.5 million at close and a disproportionate amount of the Gazania-1 exploration well and other joint venture costs. Azinam paid a US$1.5 million deposit to Africa Energy at signature of the Azinam Farmout Agreement and will place an additional amount into escrow at close to support its obligations under the Azinam Farmout Agreement. Azinam is a private Southern Africa-focused oil and gas exploration company backed by Seacrest Capital. Azinam is part of a group of upstream oil and gas companies with extensive operating experience, including drilling multiple wells in the North Sea.
Under the terms of a farmout agreement entered into with a subsidiary of Panoro Energy ASA ("Panoro"), a wholly-owned subsidiary of Africa Energy will farmout a 12.5% participating interest in Block 2B to Panoro (the "Panoro Farmout Agreement"). In consideration for the assignment of this interest, Panoro will pay a disproportionate amount of the Gazania-1 exploration well costs. Panoro is an Africa-focused independent oil and gas exploration and production company listed on the Oslo Stock Exchange.
Block 2B is located in the Orange Basin and covers 3,604 square kilometers off the west coast of South Africa 300 kilometers north of Cape Town with water depths ranging from 50 to 200 meters. Oil was discovered and tested by Soekor in the A-J1 borehole drilled in 1988. Thick reservoir sandstones were intersected between 2,985 meters and 3,350 meters. The well was tested and flowed 191 barrels of oil per day of 36 degree API oil from a 10 meter sandstone interval at about 3,250 meters. Significant prospectivity has been identified over the entire A-J graben area using 686 square kilometers of 3D seismic data from 2013.
Africa Energy currently holds a 90% participating interest and is the operator of Block 2B. Crown Energy AB indirectly holds the remaining 10% participating interest. Closing of the farmout transactions is subject to standard conditions for a transaction of this type, including approval by the South African government.
About Africa Energy Corp.
Africa Energy Corp. is a Canadian oil and gas company with exploration assets offshore South Africa and Namibia. The Company is listed in Toronto on TSX Venture Exchange (ticker "AFE") and in Stockholm on Nasdaq First North Growth Market (ticker "AEC"). Africa Energy is part of the Lundin Group of Companies.
Africa Energy is obliged to make this information public pursuant to the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact persons set out above on February 25, 2020 at 1:30 a.m. ET.
The Company's certified advisor on Nasdaq First North Growth Market is Pareto Securities AB, +46 8 402 5000, email@example.com.
Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or the Company's future performance, business prospects and opportunities, which are based on assumptions of management.
The use of any of the words "will", "expected", "planned" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of certain future events. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in oil prices, results of exploration and development activities, including results, timing and costs of seismic and drilling activity in the Company's area of operations and, uninsured risks, regulatory changes, defects in title, availability of funds required to participate in the exploration activities, or of financing on reasonable terms, availability of materials and equipment, timeliness of government or other regulatory approvals, actual performance of facilities, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual future results may differ materially. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Company. The forward-looking information contained in this release is made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information.
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SOURCE Africa Energy Corp.