Simba Energy Inc. has signed a memorandum of understanding (the 'MOU') with Ajax Exploration Ltd. ('Ajax'), a privately-owned oil and gas company, to farmout a 66% interest and operatorship of Block 2A, onshore Kenya ('Block 2A').

The MOU, which is to be superseded by definitive farmout agreement (the 'Farmout Agreement') that Simba expects to be finalized and executed shortly, is intended to set out the principal commercial terms of the farmout only, which are as follows:

Highlights of MOU:

• The transaction provides a significant investment in Simba's Kenya asset, delivering a fully carried pre-drill exploration program and a commitment to drill and carry Simba for one exploration well • Ajax is to commit to a work program including drilling one well for Simba representing a gross investment of up to US$36.5 million (assuming a well cost of US$25 million in Kenya) • Ajax will pay Simba up to US$3.1 million in back costs. In addition, Ajax will provide a net carry of up to US$12.4 million (assuming a well cost of US$25 million)

Tags: Simba Energy Inc.