Canada-based oil and gas company Octant Energy Corp. has announced that it has entered into three agreements with subsidiary companies of cash strapped Afren PLC to acquire assets in the Republic of Kenya and the United Republic of Tanzania.
The acquisition is important in the development of these assets for the region as it ensures that a team with extensive regional knowledge progresses the respective Production Sharing Contracts forward and raising the profile of the region through the continued delivery of near term actionable items on these assets.
The Octant team is led by Richard Schmitt, President & CEO, and Christopher McLean, Executive Chairman of whom have a long term history in the region with experiences going back to the initial acquisition and finance of the current discoveries in Kenya and select assets in Tanzania over the last 7-10 years.
“I am encouraged to be working with assets I know well from my past experiences. This portfolio that Octant has secured is pivotal in the future development of Kenya and Tanzania as they further movement towards energy security and domestic growth in the countries. For me, being a part of East African growth and development again is a great opportunity and privilege,” says Richard Schmitt, President and CEO of Octant.
Once approval is received Octant will complete the acquisition of the PSC’s from Afren within 7 days. At this time Octant is evaluating its future capital requirements with respect to these PSC’ and will provide future updates with respect the Proposed Transaction in due course.
Afren is currently operating under an extension of its license in Block 1 after Kenya’s Ministry of Energy granted its subsidiary East African Exploration (EAX) a 15 month extension to the current Second Additional Exploration Period as a result of security concerns in the area. There is also an ongoing arbitration action against East African Exploration (Kenya) Limited (EAX) by Taipan resources in regards to certain breaches to the Joint Operating Agreement (JOA) signed between EAX and Lion in respect of Block 1
Afren which is currently in administration has 80 percent interest in Kenya’s Block 1 and 100 percent in Blocks L17 & L18 and is the operator in all three blocks. In Tanzania the company has 74 percent working interest in the Tanga programme.
The acquisition of the PSC’s’ by Octant remains conditional on customary approvals from the respective governments.