Azinam Limited, the Seacrest Capital-backed oil & gas exploration company, has made an agreement with OK Energy that will lead to Azinam doubling its exploration footprint offshore South Africa.
Azinam informed on Wednesday that it had reached an agreement on terms with the principals of OK Energy whereby Azinam, subject to contract, would become a significant minority shareholder in OK Energy.
OK Energy holds a 10% participating interest in two blocks offshore South Africa (Orange Basin and Algoa Basin). Upon completion, Azinam will hold an effective 4.9% interest in these licenses. The principals of OK Energy will become minority shareholders in Azinam.
The Northern Cape Ultra-Deep block (ER 274) in the Orange Basin, in which OK Energy holds a 10% participating interest, is operated by Shell, with a 45% participating interest. Kosmos Energy owns the remaining 45% participating interest.
The East Algoa block (ER 257) in the Algoa Basin, in which OK Energy holds a 10% participating interest, is operated by Equinor with a 60% participating interest. Total owns the remaining 30% participating interest.
OK Energy benefits from significant carries on the Northern Cape Ultra-Deep block and the East Algoa block, resulting from prior farm-outs to the other license participants. As a shareholder in OK Energy, Azinam will benefit from these arrangements.
Daniel McKeown , Managing Director of Azinam, commented: “An indirect interest in OK Energy’s two South Africa licenses gives Azinam further exposure to the Orange Basin and new exposure in the Algoa Basin. Both license positions enjoy significant carries from the larger on-license partners. These positions offer a doubling of exploration exposure for Azinam offshore South Africa.
“The Northern Cape Ultra-Deep block, which is in the Orange Basin, is very close to Total SA’s highly anticipated Venus well, which is expected to spud in Q3 2020. Azinam expects further third-party Orange Basin exploration drilling activity in late 2020 / early 2021 close to Northern Cape Ultra-Deep block and Azinam’s 3B/4B Block.”
Erika Syba , Director of OK Energy, commented: “We are pleased to broaden our exposure to a number of exciting plays with near-term exploration activity in Namibia and South Africa. The region is attracting much-deserved attention with the discovery of Brulpadda and the near-term drilling of the Venus prospect, directly offsetting the enlarged group’s holdings in the Orange Basin.”
Earlier this week, Azinam entered into another agreement, which will see the company become the operator of Block 2B located offshore South Africa.
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