Staff Reporter
TSUMEB, November 14 — Energy firm 88 Energy has finalized a three-stage farm-in agreement with Monitor Oil and Gas Exploration (Namibia) (MELN), a Namibian company, aiming to acquire a maximum 45% stake in onshore petroleum exploration license 93 (PEL 93) in Namibia’s Owambo Basin.
According to the terms, 88 Energy’s wholly owned subsidiary, 88 Energy (Namibia) (88EN), will initiate the agreement by making a series of four payments totalling $3.7 million (A$5.8 million) to MELN, securing an initial 20% stake in PEL 93.
In the second stage, 88 Energy will contribute $7.5 million towards the initial well’s gross cost, estimated at $12 million, to gain an additional 17.5% stake.
In the third and final stage, 88 Energy holds the option to fund $7.5 million of the second well’s gross cost, earning an extra 7.5% stake, bringing their total stake in the license to 45%.
MELN is entitled to a gross royalty of 2% from the revenues generated by the license. The completion of the agreement is contingent upon approvals from the Namibian Government and other regulatory bodies.
PEL 93 encompasses blocks 1717 and 1817 in Namibia’s Owambo Basin, recognized as a highly promising region for oil and gas exploration, with notable discoveries in recent years.
Dave Wall, CEO of 88 Energy, emphasized the significance of the farm-in agreement, labelling it a “major milestone” and an “exciting opportunity” to enhance the company’s exploration asset portfolio.
“The Owambo Basin is a highly prospective area for oil and gas exploration, and we are confident that the farm-in agreement will provide us with the opportunity to make a significant discovery,” Wall stated.
The farm-in agreement is anticipated to conclude in the fourth quarter of 2023, pending approvals from the Namibian Government and regulatory authorities.
