88 Energy has signed an agreement to earn a 45% stake in onshore petroleum exploration licence 93 (PEL 93) in the Owambo Basin, Namibia, from Namibian company Monitor Oil and Gas Exploration (Namibia) (MELN), a wholly owned subsidiary of Monitor Exploration.
Under the three-stage farm-in agreement, 88 Energy’s wholly owned subsidiary 88 Energy (Namibia) (88EN) will initially make a payment of US$3.7 million to MELN, over four instalments, for a total of a 20% stake in PEL 93.
In the second stage, 88 Energy will make a US$7.5 million payment towards the first well gross cost, estimated at US$12 million, to receive an additional stake of 17.5%.
88 Energy, in the third stage, will have the option to fund US$7.5 million of the second well gross cost to earn an additional 7.5% stake in the licence. This will bring 88 Energy’s aggregate stake in the licence to 45%.
Covering an area of 18,500km², PEL 93 comprises blocks 1717 and 1817.
MELN will receive a gross royalty of 2% of the revenues produced from the licence.
“The execution of this farm-in agreement with Monitor provides 88 Energy and its shareholders with a fantastic opportunity to earn a significant working interest in a very large scale, highly prospective, under-explored acreage position on attractive and logically staged commercial terms,” 88 Energy Managing Director, Ashley Gilbert said.
“We are very pleased to be partnering with Monitor who will provide a wealth of technical expertise and strong in-country and regional exploration experience. Monitor has completed a systematic historical work-programme that has identified significant large-scale, untested prospects.”
The agreement is subject to Namibian Government and other regulatory approvals.
88 Energy is a dual-listed oil and gas exploration and production company with a North American focus.-https://miningandenergy.com.na/
