Africa Energy signed a multimillion deal with Pancontinental to take 33.33% stake in subsidiary Pancontinental Namibia (PNPL).
Pancontinental will retain 66.67% of the issued capital of PNPL, which holds a 30% interest in the highly prospective license PEL 37, offshore Namibia.
Africa Energy has already made its first payment of US$2.2 million at closing of the deal, and a second payment of $5.5 million will be due at spud of the next well to be drilled in PEL 37.
“This secures a relationship we have jointly been pursuing for some time and is an important outcome for Pancontinental. The transaction implies a value for our effective 20% retained interest in PEL 37, well in excess of our market capitalization leading up to this announcement,” Pancontinental CEO John Begg said.
The investment by Africa Energy into PNPL continues a trend of significant companies taking a position offshore Namibia, including the recent ONGC Videsh farmin to PEL 37, and news that oil major Total has also recently farmed into a deepwater block elsewhere in Namibia.