Swala Oil will not extend the deadline to complete the previously announced investment in PAE PanAfrican Energy Corporation, the firm has announced.
The Dar es Salaam stock exchange listed firm has noted that it will not extend the deadline on investment of up to US$130 million for any specific time period.
PAE PanAfrican Energy Corporation is a subsidiary of Orca Exploration Group.
“The extension pertains to tranche 2 and tranche 3 and does not impact tranche 1 which closed on January 16, 2018. The decision was taken in consideration of the uncertainty in the timing of the regulatory approval of Swala’s prospectus and listing application in Mauritius.” A statement from the firm reads.
In May this year, the Canadian firm Orca Extended the Tanzanian deal deadline to allow it to achieve key stages in the divestment of a 40% interest in its Tanzania gas production business to local firm Swala Oil from May 11 2018 to June 29 2018.
Swala has a 75% participating interest in Kilosa-Kilombero and a 100% participating interest in Block D. Swala has also become a shareholder of PAE PanAfrican Energy Corporation (“PAEM”), a Mauritius-registered company that owns PanAfrican Energy Tanzania Limited (“PAET”). PAET in turn holds the rights granted by the Government of Tanzania to explore, develop, market, produce and sell natural gas from the Songo Songo gas field in Tanzania, the associated infrastructure and distribution and marketing agreements with private sector and state enterprises.
The decision not to extend the deadline does not terminate the Swala Investment and Orca continues to support Swala’s efforts in closing its financing. However, Orca may terminate the balance of the Swala Investment at any time.
According to Swala’s CEO Dr. David Mestres Ridge “Swala and Orca will continue to complete the process started earlier this year, but do not believe that either company is served well by agreeing to timelines that are outside of their control. The process in Mauritius is advancing at creditable speed but oil and gas is a new investment area and the regulator has spent time thoroughly understanding the Swala prospectus. Our understanding is that the prospectus will be reviewed by the Executive Committee of the SEM this coming week and are already engaging with Tanzanian and overseas investors in anticipation of an early closing.”
Swala holds assets in the world-class East African Rift System with a total net land package in excess of 14,000 km2 as well as a 7.93% interest in PAE PanAfrican Energy Corporation. New discoveries have been announced by industry participants in a number of licences along this trend that extend the multi-billion-barrel Albert Graben play so successfully developed by Tullow Oil into the eastern arm of the rift.
Orca is an international public company engaged in natural gas exploration, development and supply in Tanzania through its subsidiary PAET. Orca trades on the TSX Venture Exchange under the trading symbols ORC.A and ORC.B.