Swala Energy to Farm Out 25% Stake in Kenya's Block 12B
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:
- Pay Swala’s past costs
- Pay all of Swala’s costs associated with the planned 217 miles (350 kilometers) 2D seismic survey up to a cap of $2.7 million (net to Swala’s working interest)
- Pay all of Swala’s costs associated with the drilling of a first exploration well up to a cap of $7.5 million (net to Swala’s working interest), subject to positive results from the 12B seismic survey
- Pay all of Swala’s costs associated with the drilling of a second exploration well up to a cap of $7.5 million (net to Swala’s working interest), subject to positive results from the first exploration well
- Pay all of Swala’s costs associated with any work programme agreed to by a majority vote under the Production Sharing Agreement (PSA) in excess of the work commitment under the PSA
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”.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- McDermott Settles Reficar Dispute
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- USA Oil and Gas Job Figures Jump
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension