Oil and gas firm Africa Energy has signed agreements to increase its stake in Block 11B/12B offshore South Africa, from 4.9% to 10%.

Covering an area of 18,734km2, the Block 11B/12B is located in the Outeniqua Basin nearly 175km off the southern coast of South Africa. It is contained in water depths ranging from 200m-2,000m.

Africa Energy currently holds 49% interest in Main Street 1549, which has a 10% stake in Block 11B/12B. Arostyle Investments owns the remaining 51% stake in Main Street 1549.

Total E&P South Africa operates Block 11B/12B with 45% interest, while Qatar Petroleum and CNR International own 25% and 20% stakes, respectively.

As per the terms of the deals, Africa Energy will initially secure the indirect financial interest held by Impact Oil & Gas.

Africa Energy will later exercise an option from Arostyle Investments to acquire the entire interest, following drilling the Luiperd-1X well.

Africa Energy president and CEO Garrett Soden said: “Block 11B/12B offshore South Africa contains one of the most exciting oil and gas exploration plays in the world today.

“In anticipation of the Luiperd-1X well results expected later this year, we have agreed with Impact and Arostyle to simplify and consolidate Main Street’s 10% interest in Block 11B/12B under Africa Energy.”

Impact and Arostyle to become significant shareholders of Africa Energy

Upon completion of the deals, Impact and Arostyle will become significant shareholders of Africa Energy. The transactions, however, are subject to various consents and approvals.

Impact Oil & Gas CEO Siraj Ahmed said: “We are pleased to be part of the proposed consolidation of the interests of all Main Street stakeholders under Africa Energy, resulting in Africa Energy holding a direct 10% interest in Block 11B/12B.

“This transaction is a significant milestone for Impact, providing the Company with liquid stock in Africa Energy and retaining a significant exposure to one of the most exciting oil and gas exploration plays in the world today, ahead of the Luiperd-1X well results.

“In line with our strategy, the transaction provides Impact with additional options for monetisation of our participation in the Block following our first successful exploration well last year.”

In July 2020, Africa Energy said that it is set to begin a multi-well drilling campaign on Block 11B/12B using the Odfjell Deepsea Stavanger semi-submersible rig.