WA-based oil and gas company Jacka Resources has entered into an agreement with Providence Resources to acquire a direct interest in the OML 113 petroleum licence in Nigeria, which includes the Aje oil and gas field.
Jacka entered into a Heads of Agreement with Providence in September, and has now launched a binding sale and purchase agreement (SPA). This transaction is expected to close around December 15, 2011, a month later than originally announced, subject to receipt of all necessary corporate and regulatory approvals.
The closing of the transaction will trigger the payment of US$9 million (A$8.7 million), which was previously announced to be due on November 15. Jacka recently undertook a capital raising of $7.5 million by way of a share placement and underwritten options exercise, making up the difference with existing cash.
The transaction is conditional upon waiver of joint venture pre-emptive rights and the receipt of all necessary corporate, shareholder, and regulatory approvals. Upon closing of the transaction Jacka will own a net 5% revenue earning interest in the Aje field.
The second and final tranche of US$6 million is due in April.
Jacka chairman Scott Spencer said: “We are pleased to see the execution of the SPA to secure the acquisition of an interest in the Aje Oil & Gas field and we look forward to working with internationally recognised partners to move development plans forward.”
Jacka will join the joint venture alongside YFP acting as operator, technical advisor Chevron, Vitol, and Panoro Energy, after the transaction is complete.
“The acquisition of an interest in the OML 113 offshore Nigeria, together with the Bargou block farm in Tunisia including the early appraisal opportunity at Hammamet West, gives the company not only a substantial resource base with near-term access to cash flows but also delivers substantial exploration upside which is a core consideration in the company’s forward strategy,” Spencer added.
The acquisition is expected to deliver net P50 contingent resources of around 10 million barrels of oil to Jacka.
Jacka holds assets in the Gulf of Hammamet, Tanzania, and also the Exmouth Basin in WA.