Shares in West Perth-based energy hopeful Pancontinental Oil & Gas were up 33 per cent today after the company sold part of its stake in a Namibian offshore exploration licence to Africa Energy for $US7.7 million ($9.6 million).
Shares in West Perth-based energy hopeful Pancontinental Oil & Gas were up 33 per cent today after the company sold part of its stake in a Namibian offshore exploration licence to Africa Energy for $US7.7 millionn ($9.6 million).
Pancontinental’s Namibian subsidiary, PNPL, holds a 30 per cent stake in the licence.
Africa Energy has taken a 33.3 per cent stake in the PNPL entity, with Pancontinential to hold the remaining share.
Africa has paid $US2.2 million upfront, with the remainder to flow at the commencement of the drilling the next well at the site.
The cash will go towards working capital and growth activities, Pancontinental said.
Pancontinental chief executive John Begg said the two companies had been pursuing an agreement for some time.
“The transaction implies a value for our effective 20 per cent retained interest in PEL 37, well in excess of our market capitalisation leading up to this announcement,” he said.
“In parallel, we have two fully funded wells near term in California, the first of which has just reached total depth after encountering high gas shows in all target levels.
“The deal with Africa Energy is both an endorsement of Pancontinental’s historic African asset selection process led by Barry Rushworth and of the large oil potential that international companies see in our Namibian acreage.
“Once again, as more recently in California, Pancontinental has secured a high quality industry partnership, notwithstanding the challenging conditions for the oil and gas industry generally”.
Pancontinental shares traded at 0.4 cents each at that time of writing.