Australian company exploring the East African Rift System in Kenya, Tanzania and Zambia has said it is awaiting the receipt of signed farm-out documents having finalized the final steps in the agreement.
According to the Company’s Non-Executive Chairman Mr. Ken Russell it is however still not possible to name the new partners due to confidentiality agreements until the receipt of those signed documents.
“In our market update issued on 14 May 2015 we mentioned that the final steps were being undertaken. Those steps are being completed by the other party and we are now awaiting receipt of the final signed documentation. Obviously we were hoping to be in receipt of those documents for today’s AGM however wheels do not always revolve as quickly as we would all like so I’m afraid that is about all we can say on the subject at the moment due to confidentiality agreements associated with the project but we expect to be able to make a more detailed statement in the very near future,” says Rusell.
The new partner is expected to fill the funding gap the company faces to complete its contract commitments with the company expected to drill three wells in three licenses in 2016.
Some of the funding gaps arose from the withdrawal of Spanish explorer CEPSA from Kenya’ s block 12B with the farmee according to the farm-out agreement expected to:
• Pay Swala’s past costs;
• Pay all of Swala’s costs associated with the planned 350-km 2D seismic survey up to a cap of US$2.7 million
• Pay all of Swala’s costs associated with the drilling of a first exploration well up to a cap of US$7.5 million 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 US$7.5 million 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 in excess of the work commitment under the PSA.
The announcement by Russell comes even as the company said it would conduct continue with its 2016 drilling programme in three licenses including at Ahero-A prospect in Kenya, 4 moshi basin leads in the Pangani license as well as the Kito Prospect and Ngazi lead in the Kidatu basin in the Kilosa Kilombero license.
Moshi basin leads
The company has also in the recent past signaled it will participate in the upcoming licence rounds in Uganda.