Impact Oil & Gas announced that its wholly-owned subsidiary, Impact Africa has entered into an agreement with BG International, a wholly , of Royal Dutch Shell for the farm-out of a 50% working interest and operatorship in the Transkei & Algoa exploration right, offshore South Africa (Exploration Right reference 12/3/252).
Under the terms of the farm-out agreement, Shell will acquire a 50% working interest in the Transkei & Algoa blocks and operatorship. Shell has also been granted the option to acquire an additional 5% working interest should the joint venture elect to move into the Third Renewal Period, which is expected to be approx. 2024.
Siraj Ahmed, CEO of Impact Oil & Gas, commented: “’We are delighted to have secured a farm-out partner of Shell’s caliber, highlighting the significant value potential of our exceptional South African exploration portfolio. Shell joins the Transkei & Algoa license at a very exciting time for exploration drilling in South Africa. They bring substantial exploration expertise, with particular understanding of the potential of offshore South Africa, and an agreed strategy to accelerate the work program to build upon the considerable work already undertaken by Impact and the previous JV partnership.”
While part of the same license, the Transkei & Algoa blocks have different geological settings. The Algoa block is situated in the South Outeniqua Basin, a short distance east of Block 11B/12B, containing the Brulpadda gas condensate discovery and where Total has recently announced a further significant gas condensate discovery, following the successful drilling of the Luiperd-1X exploration well, which it is currently testing. The Transkei block is situated north-east of Algoa in the Natal Trough Basin where Impact has identified highly material prospectivity associated with several large submarine fan bodies, which this joint venture will explore with focused 3D seismic data and then potential exploratory drilling. Impact and Shell plan to acquire over 6,000 sq km of 3D seismic data during the first available seismic window following completion of the transaction. This window is expected to be in the first quarter of 2022.
Exploration Right 12/3/252, Transkei & Algoa is located offshore eastern South Africa and covers approx. 45,838 sq km in water depths up to 3,000 meters. The license was initially awarded to Impact as a Technical Cooperation Permit in 2012, followed by an application for an Exploration Right, which was granted in 2014.
Closing of the transaction is subject to customary conditions, including the approval of the Government of South Africa. The participating interests in the Transkei & Algoa blocks following completion of the farm-out by Impact will be as follows: Shell (Operator), 50% and Impact, 50%.