- Published on Monday, 18 February 2013 07:46
- Published by Isaac Twumasi-Quantus
- Hits: 249
Westbridge Energy Corp. entered into a LoI with Ropat Petroleum Investments to acquire a majority interest in four blocks offshore Namibia. The two firms signed a petroleum agreement with the Mining, Minerals, and Energy Department for blocks 1911A relinquished, 1912B, 1910A relinquished, and 2011A relinquished.
Ropat is a private oil and gas company incorporated in Namibia.
Upon completion of the transaction, Westbridge will be the operator of the blocks with a 75% interest. Ropat will have a 15% interest and the remaining 10% interest will be held by Namibia’s state-owned Namcor. The state-run firm’s interest will be carried with certain back-in rights for the blocks.
Westbridge and Ropat have agreed to proceed diligently and in good faith to negotiate and enter into a definitive agreement in relation to the transaction before the end of February.
Consideration for the transaction will comprise 5 million common shares in the capital of Westbridge to the shareholders of Ropat and a cash payment of $500,000 on the closing date of the transaction. The Westbridge shares will be subject to a statutory four-month hold period from the date of issue and such other regulatory hold period imposed by the TSX Venture Exchange.
In addition the Westbridge Shares will be subject to a contractual hold period (the Lock-up Arrangements) from the date of issue providing for release on the following basis: a third will be released 6 months from the date of issue, a further third will be released 12 month from the date of issue and the final third will be released 18 months from the date of issue.
Westbridge will also make a cash payment to Ropat of $1 million upon the satisfactory completion of some conditions to be set out in a definitive agreement in relation to the transaction such as the receipt by Westbridge of an independent technical report from a reputable firm indicating the blocks contain a risked, recoverable, P50 resource estimate of 1,000 Mmboe or greater; and that Westbridge have a net cash balance of more than $15 million.
The acreage is situated in the Walvis Basin in northern Namibia, close to the Namibia - Angola border and are contiguous to Block 1811B in which Westbridge currently has an 80% working interest and is operator.
The acquisition of the licenses increases Westbridge’s existing areal coverage in offshore Namibia from 1.4 million acres to a total of approx. 5.3 million acres.
The blocks cover water depths ranging from the shoreline to 1,800 meters and are covered by over 10,000 line km of good quality 2D seismic data. Westbridge's initial technical analysis indicates the blocks show similar geologic play concepts and trends to those observed in other prolific petroleum basins in Brazil and the deepwater of Ghana, Angola, Liberia, and Sierra Leone.
Cody Lee, CEO of Westbridge, commented, “These new licenses represent a highly complementary geologic extension of Westbridge's existing asset base and hold world-class discovery potential. The acquisition of these highly prospective licenses validates our selection of the contiguous position of Block 1811B where we have an 80% working interest. Furthermore, this Transaction demonstrates Westbridge’s ability to leverage our strong local partnerships to acquire world-class assets.”
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