Calima Energy Ltd has entered into an agreement to sell its interest in the Namibia PEL 90 licence (Block 2813B) to Tullow Namibia Ltd (Tullow), a subsidiary of Tullow Oil plc, a deepwater operator.
The parties have agreed to a 60-day exclusivity period to enable the satisfaction of certain industry standard conditions precedent, which include; entering into a formal sale and purchase agreement, customary due diligence, Tullow board approval and Government and partner approvals relating to the assignment of interest and transfer of Operatorship. Calima will receive US$2.0 million on completion. Success bonuses totalling US$10.0 million will be paid in two equal tranches (US$5.0 million) following the grant of a production licence and then upon the commencement of commercial production.
Alan Stein, Calima’s Managing Director, commented: “With recent drilling success in the Montney [British Columbia, Canada] this transaction allows us to focus capital allocation towards Canada while maintaining financial leverage to exploration success in Namibia. The Namibian block is a world-class exploration play with extraordinary upside but it will require considerable investment and time to reach the point of exploration drilling. The Montney offers our shareholders a significant value proposition in the short term where the company can now put in place the building blocks of a world-class development with modest capital investment. We wish Tullow and our Namibian partners every success in Block 2813B."