I suspect that the firm in partner is Tullow. Tullow being the operator of this block, has first hand information on the blocks prospects. If the prospects are good, Tullow would most probably want to increase their holding.
Anyway the potential farm in, is good news for Swala shareholders regardless of the farm in partner. The government of Kenya has agreed to a number of farm in/out in the last 2 months, hence, I see no reasons for objection. Further, if the government of Kenya looks at the Swala Tanzania (SOGTL) model, they would probably want to replicate it.
My understanding is that the firm out is valued at 36 million, out of which 17.5 million is committed to block 12B. Is the balance of 18.5 million a cash injection into the company? If it is a cash injection, this should see Swala through the 2014 work programs for pagani, KK and Eyasi (if awarded). The government of Tanzania should now look at Swala as a company that is capable of developing the Eyasi Block along side local Tanzania shareholders (private placement and DSE)
Just speculating
SWE Price at posting:
29.0¢ Sentiment: LT Buy Disclosure: Held
