Toronto-based Sintana Energy Inc. is acquiring up to 67 percent of the issued and outstanding shares of Giraffe Energy Investments (Pty) Ltd., which owns a 33 percent interest in Petroleum Exploration License 79 (PEL 79) governing blocks 2815 and 2915 in Namibia’s Orange Basin.
Sintana is purchasing the stake from Crown Energy (Pty) Ltd., a private Namibian company.
The acquisition provides Sintana with “an attractive entry into a high impact license with significant upside,” the company said in a news release, adding that Namibia’s Orange Basin is emerging as “the world’s next hydrocarbon province”. The National Petroleum Corporation of Namibia (NAMCOR) is currently the operator with a 67 percent interest in PEL 79.
The acquisition is structured as an initial purchase of 49 percent of the issued and outstanding shares of Giraffe from Crown Energy for a cash consideration of $2 million, which Sintana plans to fund from resources on hand.
Sintana retains an option to increase its ownership up to 67 percent of Giraffe anytime over the five years “following closing based on the shares issued and outstanding at the time of the option exercise” for an additional cash payment at the time of exercise of $1 million.
The acquisition remains subject to the satisfaction of various closing conditions and the receipt of all applicable approvals, including, without limitation, the approval of the TSX Venture Exchange, according to the release.
Sintana added that it has an “emerging partnership” with Quantum Xploration Inc. (QXI) associated with the acquisition to deepen its technical, operational and in-country capabilities in Namibia.
“We are pleased to announce the potential expansion of our Orange Basin platform through the acquisition of a significant stake in Giraffe Energy,” Sintana CEO Robert Bose said. “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”.
“We are pleased to welcome Sintana, together with QXI, to Giraffe Energy,” Jeremy Hangula, Director of Giraffe, said. “Our combined resources position us to capture the unique value of PEL 79”.
“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,” QXI CEO Mark Stearnes said. “We look forward to supporting NAMCOR with their continuing efforts to unlock the full exploration potential of this highly prospective license”.
In conjunction with the acquisition, an eight percent interest in Giraffe’s common equity will be contributed to a community trust. The contribution, initiated and supported by the Knowledge Katti Foundation, “will establish the first vehicle of its kind in Namibia providing a direct mechanism to bring the benefits of the oil and gas industry to local communities,” Sintana said.
Sintana said it is currently engaged in petroleum and natural gas exploration and development activities on five large, highly prospective, onshore and offshore petroleum exploration licenses in Namibia, and in Colombia’s Magdalena Basin.
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