Azinam and Panoro Energy Farm in to Block 2B, Offshore South Africa
Lundin Group exploration company Africa Energy Corp. has entered into farm out agreements with subsidiaries of privately-held Azinam Ltd. and Oslo-listed Panoro Energy ASA to transfer an aggregate 62.5% participating interest in Block 2B, offshore South Africa, in consideration for a carry through the drilling of a planned exploration well. Africa Energy will retain a 27.5% participating interest, with Crown Energy AB holding the remaining 10% interest in the block.
Under the terms of the farm out agreements, Azinam will acquire a 50% participating interest in and assume operatorship of Block 2B in exchange for a US$0.5 million cash payment at close and a disproportionate amount of the Gazania-1 exploration well (expected to spud by the end of 2020) and other joint venture costs. Panoro Energy will acquire a 12.5% participating interest in exchange for a disproportionate amount of the Gazania-1 exploration well costs.
Block 2B covers an area of over 3,600 sq. km located in the Orange Basin, situated off the west coast of South Africa in water depths ranging from 50 to 200 meters. The block contains the A-J1 oil discovery made in 1988 by former South African national oil company Soekor Pty Ltd. (which subsequently merged with Mossgas Pty Ltd. to form PetroSA).
The closing of the transactions is subject to customary conditions, including approval by the South African government.