Africa Oil Corp. (TSX: AOI) (OMX: AOI) (“Africa Oil”, “AOC” or the “Company”) is pleased to announce that it has made further investments of US$20.5 million in Impact Oil and Gas Limited (“Impact”), a private UK company with exploration assets in South and West Africa.
Additional Investment in Impact Oil and Gas
The Company has entered into a subscription agreement (the “Subscription Agreement”) with Impact providing for the exercise by AOC of the 50,343,961 ordinary share purchase warrants in Impact held by AOC at an exercise price of £0.18 per warrant and the purchase by AOC of ordinary shares of Impact in an aggregate amount of US$6.3 million. Additionally, AOC completed the previously announced acquisition of additional shares and warrants in Impact for an aggregate subscription price of US$2.5 million in November 2018 which, combining with the current investment, will result in Africa Oil holding an approximately 30% interest in Impact.
The funds provided by AOC to Impact are to be used by Impact as a loan to Arostyle Investments (Proprietary) Limited to allow Main Street 1549 Proprietary Limited (“Main Street”) to acquire a 5.1% effective interest in Block 11B/12B offshore South Africa. Block 11B/12B is located in the Outeniqua Basin approximately 175 kilometers off the southern coast of South Africa. The block covers an area of 18,734 square kilometers with water depths ranging from 200 to 2,000 meters. The Brulpadda-1AX re-entry well is expected to commence drilling before the end of this year. The partners in the 11B/12B block are Total S.A. (45%), Canadian Natural Resources Limited (20%), Qatar Petroleum (25%) and Main Street (10%). Africa Energy Corp. holds a 49% interest in Main Street and Africa Oil holds an approximately 34.6% interest in Africa Energy Corp.
Africa Oil CEO Keith Hill commented, “We are very pleased to have significant investments in two companies that have invested in Main Street, which has a material interest in the upcoming Brulpadda well. We believe the Brulpadda well to be one of the top exploration wells to be drilled in the world in 2019. The well will be operated by TOTAL, which gives us confidence that not only can the well can be drilled safely and effectively, but that the necessary technical and financial resources will be in place to move forward on any resulting discovery.”.
The transactions contemplated by the Subscription Agreement are subject to certain customary conditions to closing, including shareholder approval of Impact.
Source: Africa Oil