Strata-X Revises HOA with BotsGas for Serowe CSG Project Farm Out
TSX-V and ASX-listed Strata-X Energy Ltd. has announced a revision to the terms of its previous agreement with privately held Australian explorer BotsGas Pty Ltd. to farm out an interest in the Serowe CSG project in Botswana.
Previously, in March this year, BotsGas had executed an initial Heads of Agreement (HOA) to acquire a 49% interest in the project in exchange for funding 100% of the estimated costs of a staged drilling program (total of 19 wells) designed to de-risk the project. However, due to execution complexities surrounding the Covid-19 pandemic, the companies have now reviewed the exploration program and timing contemplated under the HOA and have revised the structure of BotsGas’ participation in the project.
Under the terms of the revised HoA, BotsGas will acquire a 49% interest in the project in exchange for funding US$4.6 million of joint venture expenditures, plus an initial payment of A$300,000 payable to Strata-X by June 30th. The agreed expenditure is to be made within 2 years of the initial payment. In addition, BotsGas will also invest A$300,000 in Strata-X by way of a private placement of 5,000,000 CHESS Depository Interests (CDIs) (with attaching options) at a price of A$0.06, which is expected to be completed by June 2nd. The parties must enter into a Joint Operating Agreement (JOA) with respect to the development of the project by no later than November 30th. Upon receipt of the JV payment and entry into the JOA, Strata-X will transfer a 49% interest in its Botswana tenements to BotsGas.
The Serowe CSG Project covers an area of approximately 4,800 sq. km in the CSG Fairway of the Kalahari basin in eastern Botswana. The project includes a total of 6 tenements with primary exploration terms extending to 2025 and in perpetuity when commercial production is established. Following an internal detailed mapping, a high-grade area within the CSG Fairway has been identified by Strata-X. The project is currently estimated to contain recoverable prospective resources of around 6.05 trillion cubic feet (Tcf), of which 2.38 Tcf lie within the interpreted CSG high-grade area.
The transaction is subject to completion of the CDI placement. If BotsGas does not complete the placement, Strata-X may elect to either waive the requirement or terminate the HOA.