Swala Oil & Gas Terminates Further Investment in PAE PanAfrican Energy Corporation

Swala Oil & Gas (Tanzania) PLC  has announced that, pursuant to the terms of its investment agreement with Orca Explorations Group in respect of PAE PanAfrican Energy Corporation (PAEM), the parties have agreed to terminate the Agreement. This is as a result of Swala not acquiring additional shares in the capital of PAEM as earlier agreed as to when the company was to acquire up to 40% interest shares in the Songo Songo producing assets currently held by the international finance corporation (IFC) for $130 million based on an agreed value of US$325 million.

In May & July Swala received extensions to the second and third closing date of the PAEM investment citing certain aspects of the listing approvals process and regulator delays.

Swala continues to hold 7.933% of the issued and outstanding shares of PAEM through the Company’s subsidiary Swala (PAEM) Limited following the completion of the first investment transaction deposited into escrow in January 2018.

Meanwhile Swala Oil & Gas has advised that it is in discussions with a US-based emerging markets institutional investor for US$75 million in acquisition funding for a transaction. The company says that in furtherance of this possible transaction, it is currently finalizing terms for its funding, which when completed is expected to lead to financing agreements within the next weeks.

“We are pleased to advise that, after considerable due diligence and engagement, the Company is finalizing commercial terms for an investment of US$75 million with an institutional investor with extensive experience in emerging markets. This capability, when formalised through to definitive agreements, should allow us to contemplate an additional transaction. There can be no guarantees that the financing or transaction contemplated, or any other, will be completed and the Company shall update the market as appropriate,” Dr. David Mestres Ridge said.

Swala Oil and Gas (Tanzania) has assets in Tanzania and Burundi including the Kilosa-Kilombero licence in Tanzania and Block D in Burundi. Swala has a 75% participating interest in Kilosa Kilombero and a 100% participating interest in Block D.

Author: OilNews

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