VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 16, 2015) -
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Africa Energy Corp. (TSX VENTURE:AFE) ("Africa Energy" or the "Company") is pleased to announce that, as part of its new corporate strategy, it has executed the following three definitive agreements which will result in the Company acquiring a 90% working interest and operatorship in Block 2B offshore the Republic of South Africa:
- a sale and purchase agreement with Afren plc, in Administration, and certain of its subsidiaries whereby the Company will acquire the Afren plc subsidiary owning a 25% participating interest in Block 2B for a cash consideration of US$1 million.
- a share purchase agreement to acquire all of the shares of Thombo Petroleum Ltd. ("Thombo"), a privately held company which holds a 34.5% participating interest in Block 2B for cash consideration of US$2 million plus the issuance of 14.8 million new common shares of the Company. The Company has also agreed to issue up to an additional 20 million common shares of Africa Energy and, at the option of the Company, to either pay and/or issue up to US$1.5 million in additional contingent cash and/or shares of Africa Energy, both payable on milestones associated with the commercialization of Block 2B.
- farm-in agreement with Crown Energy AB ("Crown") to acquire a 30.5% participating interest in Block 2B. The Company will reimburse Crown for US$0.3 million of net back costs and will fund costs for Crown's remaining 10% participating interest associated with the drilling and testing of the next well in Block 2B.
Completion of each of these transactions is subject to receipt of all requisite government and other regulatory approvals, third party consents and waiver of pre-emptive rights.
To finance these transactions, the Company has agreed to sell on a non-brokered, private placement basis, an aggregate of up to 115,041,666 common shares of the Company at a price of CDN $0.06 (US$0.0435 and ZAR 0.6552 equivalent) per share for gross proceeds of approximately US$5 million. Net proceeds of the private placement will be used towards the Company's acquisition costs for the three South African acquisitions and related exploration activities, as well as for general working capital purposes.
A 5% finder's fee may be paid on a portion of the private placement and the shares sold in the financing will be subject to a hold period of four month plus one day. Completion of the financing will be subject to regulatory approval, including the approval of the TSX Venture Exchange, and certain other customary conditions including, but not limited to, execution of subscription agreements between the Company and the subscribers. The Offering is expected to close on or before December 31, 2015.
James Phillips, President and Chief Executive Officer for Africa Energy commented, "I'm very happy to announce that we have taken the first step of our new corporate strategy by acquiring 90% of Block 2B in South Africa. Our proven Cape Town-based technical team remains the driving force behind our identification and evaluation of the opportunities available within this current oil sector downturn. I am hopeful this will be the first of a number of acquisitions to grow Africa Energy. I believe that an exploration driven strategy in Africa will deliver value to our shareholders as the world oil markets recover and that we have the technical team and access to capital from our supportive shareholders to deliver on this strategy."
About Block 2B
Block 2B is an under explored, shallow water area off the west coast of South Africa containing a proven hydrocarbon-bearing rift basin. A well drilled by South African state company Soekor in the 1980s discovered and tested oil from a Cretaceous sandstone section but there has been limited exploration since then. Block 2B contains numerous prospects identified recently by 3D seismic and limited work is now required to recommence drilling activities in the area.
About Africa Energy Corp.
Africa Energy Corp. is a Canadian oil and gas company the shares of which are listed on the TSX Venture Exchange under the symbol "AFE".
Forward Looking Information
Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance including, without limitation, the Company's new corporate strategy. Forward-looking statements include, but are not limited to, statements with respect to the satisfaction of closing conditions and proposed closing date of the acquisitions and the private placement financing, which are based on assumptions of management
The use of any of the words "will", "expected" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in oil prices, results of exploration and development activities, uninsured risks, regulatory changes, defects in title, availability of materials and equipment, timeliness of government or other regulatory approvals, actual performance of facilities, availability of financing on reasonable terms, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual future results may differ materially. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Company. The forward-looking information contained in this release is made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or applicable state securities laws, and may not be offered or sold in the United States absent registration or an exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
ON BEHALF OF THE BOARD
James Phillips, President and CEO