Reconnaissance Energy Africa Ltd announced that it has been granted a petroleum license in northwestern Botswana for 2.45 million acres (9,921 sq km) and has entered into a farm-out option agreement on these lands. The Botswana lands are contiguous to the company’s 6.3 million-acre petroleum license in northeast Namibia.
As a result of acquiring and interpreting additional tight grid regional aeromagnetic data, ReconAfrica feels it has definitively established the eastern boundary of the Kavango basin, where a deep and high potential section of the basin extends from northeast Namibia into northwest Botswana. As a consequence, ReconAfrica has successfully acquired the license covering the eastern part of the entire Kavango basin.
Terms of the license are as follows: 100% working interest in all petroleum rights from surface to basement; an initial 4-year exploration period, with renewals up to an additional 10 years, in accordance with the Botswana Petroleum (Exploration and Production) Act; and upon declaration of commercial production, the operator holds the right to enter into a 25-year production license with a 20-year renewal period, in accordance with the Botswana Petroleum (Exploration and Production) Act.
In addition, royalties associated with the production license will be subject to negotiation, in accordance with the Botswana Petroleum (Exploration and Production) Act, and generally range from 3 to 10% of gross revenue from production. The company has committed to a minimum work program of $432,000 over the first 4-year exploration period.
Source: Petroleum Africa