Canadian oil and natural gas company Sintana Energy has agreed with Namibia-based Crown Energy to acquire up to 67% shares of Giraffe Energy Investments from Crown.
Giraffe owns a 33% stake in Petroleum Exploration License 79 (PEL 79) which governs blocks 2815 and 2915 located in blocks operated by BW Energy, Rhino Resources and Shell.
The National Petroleum Corporation of Namibia (NAMCOR) owns the remaining 67% interest, and it currently operates the exploration licence.
As part of the acquisition, Sintana will partner with Quantum Xploration (QXI) to deepen its technical, operational, and in-country capabilities in Namibia.
Together with QXI, Sintana aims to focus on working with NAMCOR to identify and harness the opportunities and value of PEL 79.
Sintana Energy Board Member CEO Robert Bose said: “We are pleased to announce the potential expansion of our Orange Basin platform through the acquisition of a significant stake in Giraffe Energy.
“Together with our partners at QXI and Giraffe, we look forward to working with NAMCOR to fully realize the significant geologic, commercial, and strategic value of PEL 79.”
Giraffe director Jeremy Hangula said: “We are pleased to welcome Sintana, together with QXI, to Giraffe Energy. Our combined resources position us to capture the unique value of PEL 79.”
Under the terms of the agreement, Sintana will make an initial purchase of 49% of the issued and outstanding shares of Giraffe from Crown Energy, in exchange for $2m in cash.
The company intends to fund the transaction from its existing cash on hand.
Sintana can increase its ownership in Giraffe up to 67% anytime over the 5 years after closing, for an additional cash payment of $1m, at the time of exercise.
The acquisition is subject to the satisfaction of certain customary closing conditions, including the receipt of all applicable approvals, and approval of the TSX Venture Exchange.
As part of the acquisition, Sintana will contribute an 8% interest in Giraffe’s common equity to a community trust, which will be initiated and supported by the Knowledge Katti Foundation.
The contribution will establish a unique vehicle in Namibia that provides a direct pathway to bring the benefits of the oil and gas industry to local communities, said the Canadian company.
QXI CEO Mark Stearnes said: “As the Orange Basin continues to deliver outstanding exploration success, we are delighted to work with Sintana and Crown to enhance the technical and operational capabilities at Giraffe.
“We look forward to supporting NAMCOR with their continuing efforts to unlock the full exploration potential of this highly prospective license.”
