Swala Energy Limited (Swala or the Company), an African-focused oil and gas company, reported Monday the signing of a binding farm-out agreement for a 25 percent working interest in Block 12B (Kenya) with an international integrated oil and gas company (the Farmee), that will see Swala free carried through two exploration wells.
The principal terms of the farm-out agreement are that the Farmee will:
Completion of the farm-out is subject to certain conditions including the consent of the Kenyan Government and the Competition Authority of Kenya, until which point the Farmee has requested confidentiality. Upon completion of the transaction Swala will retain a 25 percent net working interest in Block 12B, the Farmee will own a 25 percent net working interest and Tullow Oil (LSE: TLW) will hold a 50 percent net working interest and continue to act as the Operator.
Dr. David Mestres Ridge (CEO) said, “We are very pleased to welcome a company of the Farmee’s financial and technical standing to the 12B joint venture. The Board believes the farm-out is the most cost-effective and least dilutive way to strengthen the Company’s balance sheet in anticipation of the forthcoming activity both in Block 12B and in our other assets. This will allow the Company to focus its energies and resources on existing operated assets and the continued growth of the Company’s portfolio”.
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