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Swala Energy announces successful farm-out of Tanzanian licences


Published Jun 2, 2015
Swala Oil and Gas (Tanzania)

Swala Energy Limited says that Swala Oil and Gas (Tanzania) Plc has reached agreement with Tata Petrodyne Limited, a subsidiary of the multinational Tata Sons Limited, under which TPL shall farm into the Pangani and Kilosa-Kilombero licences in Tanzania. Swala owns 58.5% of Swala Tanzania. Tata Sons Limited is the holding company of the Tata Group and holds the bulk of the shareholdings in the companies within the Group. The Tata Group has a market capitalisation of approximately US$110 billion and represents over 8% of the total market capitalisation of the Bombay Stock Exchange.

The terms of the agreement with TPL: •On receipt of governmental approvals for the transfer of interest TPL will pay Swala Tanzania the sum of US$5.7 million for a 25% equity interest in the Kilosa-Kilombero licence and a 25% equity interest in the Pangani licence as consideration towards the past costs incurred on the licences; •TPL will free carry Swala Tanzania through the costs of the initial well on the Kilosa-Kilombero licence, up to a maximum of US$2.5 million (Swala estimates the gross cost of the well to be US$10.0 million); •TPL will free carry Swala Tanzania through the costs of the initial well on the Pangani licence, up to a maximum of US$2.125 million (Swala estimates the gross cost of the well to be US$8.5 million); and •TPL will pay Swala Tanzania up to a further US$1.0 million towards the cost of a second well following a commercial discovery in the initial well on the Kilosa-Kilombero licence. Costs incurred above this sum shall be shared by the partners in proportion to their equity.

Tags: Swala Energy Limited




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