Africa Energy Closes Farmouts on Block 2B Offshore South Africa
VANCOUVER, BC, April 20, 2021 /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, has received governmental approval and closed the previously announced farmout transactions on Block 2B offshore South Africa. The Company has transferred operatorship and an aggregate 62.5% participating interest in the Exploration Right for Block 2B in consideration for a carry through the next exploration well, Gazania-1, which is expected to spud by the end of 2021. Africa Energy retains a 27.5% participating interest in Block 2B.
Garrett Soden, Africa Energy's President and CEO, commented, “We are excited to partner with Azinam and Panoro on Block 2B to drill the Gazania-1 exploration well this year. Block 2B has the A-J1 oil discovery from 1988 in shallow water close to shore with significant contingent and prospective resources. Gazania will target a relatively low-risk rift basin oil play up-dip from the discovery. IHS Markit recently highlighted Gazania as one of the top high-impact wells expected to be drilled globally in 2021. We have already started the rig contracting process, and we look forward to proving up more resource offshore South Africa.”
Africa Energy has farmed-out a 50% participating interest and transferred operatorship in Block 2B to Azinam Limited (“Azinam”). In consideration for the assignment of this interest, Azinam paid Africa Energy US$0.8 million at close, which includes reimbursement of costs incurred prior to completion. In addition, Azinam will pay a disproportionate amount of the Gazania-1 exploration well and other joint venture costs. To support this obligation, Azinam paid a second US$1.5 million deposit to Africa Energy at close and is required to place additional funds in escrow prior to signing a rig contract. Azinam is a private Southern Africa-focused oil and gas exploration company supported by Seapulse Ltd., a vehicle backed by Robert Friedland and Seacrest.
At the same time, Africa Energy has also farmed-out a 12.5% participating interest in Block 2B to Panoro Energy ASA (“Panoro”). In consideration for the assignment of this interest, subject to Azinam placing the required funds in escrow as noted above, 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 3,062 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. Crown Energy AB indirectly holds the remaining 10% participating interest of Block 2B.
Important information
This is information that Africa Energy is obliged to make 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 April 20, 2021 at 1:00 a.m. Eastern Time.
The Company’s certified advisor on Nasdaq First North Growth Market is Pareto Securities AB, +46 8 402 5000, [email protected].
Forward-looking statements
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, ability of partners to fund obligations and cost of joint venture activities, 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.Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.