Bowleven set to enter Tanzanian gas market
- Business & Finance
Bowleven, an independent oil and gas exploration company focused on Africa, has moved a step toward entering the gas market in Tanzania.
The company, which owns assets in Cameron, Kenya and Zambia, said it has signed a conditional heads of terms with Aminex to buy a 25 percent interest in the soon to be producing Kiliwani North Development Licence (KNDL) and a 50 percent interest in the “proven and highly prospective” Ruvuma PSA, in Tanzania.
Aminex, which operates both licences, has granted Bowleven a three-month exclusivity period to consummate the transaction. The deal, if completed, is valued at approximately $28 million, comprising cash, carry and share-based element.
Providing rationale for the move, Bowleven said that the opportunity offered a high quality near-term production and cash flow, alongside significant exploration/appraisal upside, located near existing infrastructure, enabling low-cost rapid development and monetization of discovered resources.
Kevin Hart, Chief Executive of Bowleven said: “The decision to enter into this Heads of Terms with Aminex follows the extensive screening of a large number of opportunities in Africa. Consistent with the Group’s strategy, the deal affords Bowleven the opportunity to participate in highly attractive production and material appraisal/exploration assets without compromising its robust balance sheet and strong capital discipline.
“During the forthcoming period of exclusivity we look forward to working closely with Aminex in order to finalise the proposed transaction.”
The effective date of the transaction is January 1, 2016. The completion of the deal is subject to satisfactory completion of due diligence by Bowleven; Agreement of a Sale and Purchase Agreement (SPA) for the transaction; Approval by the shareholders of Aminex PLC; Approval by the Tanzanian government of the transfer of the equity interests from Aminex to Bowleven.