The operator will hold the right to enter into a 25-year production licence with a 20-year renewal period after declaration of commercial production
Canadian oil and gas company, Reconnaissance Energy Africa (ReconAfrica) has secured a new petroleum licence covering the eastern extension of the deep Kavango basin in northwestern Botswana.
The company has also signed a farm-out option agreement on the lands, which cover 2.45 million acres (9,921km2).
The land are also contiguous to ReconAfrica’s 6.3 million acre petroleum licence in northeast Namibia.
The terms of the licence include 100% working interest in all petroleum rights from surface to basement, an initial four-year exploration period, with renewals up to further 10 years.
The licence operator holds right to enter into a 25-year production licence
As per the Botswana Petroleum (Exploration and Production) Act, the operator will hold the right to enter into a 25-year production licence with a 20-year renewal period after declaration of commercial production.
Additionally, the royalties that are associated with the production licence will be subject to negotiation, and usually range from 3 to 10% of gross revenue from production.
ReconAfrica said that the acquisition and analysis of the Botswana lands and initial data set used to define the most eastern portion of the Kavango basin in Botswana was initiated over the past several years by a private company.
The private company is controlled by Craig Steinke, a related party to ReconAfrica.
ReconAfrica has also entered into a farm-out option agreement with a private company wholly-owned by Steinke for the Botswana lands.
The agreement is subject to certain conditions that include the approval of the Botswana Department of Mines and Ministry of Mineral Resources, Green Technology and Energy Security (MMR) to the transfer of the licence upon exercise of the option.