Africa Energy announces the signature of definitive agreements to acquire an effective 4.9% interest in the Exploration Right for Block 11B/12B offshore South Africa.
Block 11B/12B is located in the Outeniqua Basin approximately 175km off the southern coast of South Africa. The block covers an area of approximately 19,000sq km with water depths ranging from 200m to 2,000m.
Total E&P South Africa BV, a wholly-owned subsidiary of Total, is the operator and has a 50% interest in Block 11B/12B. CNR International (South Africa) (CNRI), a wholly-owned subsidiary of Canadian Natural Resources, owns the remaining 50%, Africa Energy reported in a 20 November press statement.
Africa Energy holds 49% of the shares in a new special purpose vehicle, Main Street 1549 Proprietary, which has entered into farm-out agreements with Total and CNRI separately to acquire 5% from each for an aggregate 10% participating interest in Block 11B/12B (4.9% net to Africa Energy).
Garrett Soden, Africa Energy's president and CEO, commented: "We are excited to partner with Total and CNRI on Block 11B/12B. This is a unique opportunity for a company of our size to work with majors in what we believe to be the most prospective geology offshore the African continent. Our technical team knows the area well from their previous exploratory work off the southern coast, and we look forward to the proposed exploration well on Block 11B/12B."
Africa Energy paid a deposit of US$0.49 million at signature and will pay an additional $6.86 million at closing. The company has agreed to fund a portion of Total's and CNRI's costs for the proposed exploration well to a maximum of $7.55 million, plus certain contingent payments due at various milestones associated with commercialization of hydrocarbons from Block 11B/12B. The closing, carry and contingent payments will be funded from cash on hand and/or from third party sources.
Closing is subject to approval by the South African government and Canada's TSX Venture Exchange, as required.
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