Swala Energy (SWE) is on the boards todaymorning at 10am Perth time. A little breakdown of the story:
$17m EV at IPO with $10m cash
Summary of Opportunity Huge acreage position acquired ahead of recent discoveries (4 from 4 so far) in the hottest exploration play in Africa. Partnered with Tullow, who has been responsible for ~2bn barrels discovered in the same play in Uganda, and also the recent discoveries in Kenya, which may be bigger. Management have extensive African experience having built a portfolio previously and monetising for $110m.
Regional Activity Tullow has discovered >2b barrels in Uganda since 2006 (soon after the discovery well it acquired Hardman for $1.5b) Tullow now believe that similar or greater potential exists in Kenya Flow rates of 2,800bopd achieved at Twiga – 5,000bopd estimated once put on pump First zone at Ngamia (did not flow at Twiga) – 281bopd – 5 more zones to test (including those at Twiga and thicker) Step out to the east at Pai-Pai also discovered oil and is awaiting a test Oil now also discovered at Sabisa in southern Ethiopia – sidetracking at the moment to test Means 4 from 4 wells Up to 17 wells are planned in the region over the next 18 months
Company Huge exposure to East African Rift System - 15,300km2 net acreage position – which is huge and expected to grow African Oil increased in share price from ~$1.50 to >$11.00 after the discoveries at Ngamia and Twiga in Kenya 50/50 with Tullow in Kenya (south of existing discoveries in different sub basin but same play) Oil seeps on the block and evidence of hydrocarbon basin Forward program is to analyse seeps (results mid 2013), shoot seismic (results Q3), drill a well (Q1 2014) Partnered with Otto on two blocks in Tanzania (Swala 32.5% and operator) Huge blocks that are a continuation of the rift system Early stage but evidence of hydrocarbon basin and potential seeps Forward program shoot seismic (results Q3) Additional acreage under application and likely to be awarded
Newsflow Others drilling ~ 1 well per month over the remainder of 2013 Testing at Ngamia continuing in near term Plus potential testing now at Pai Pai and Sabisa in coming months Award of additional licences in near term Initiation of coverage one month after listing – coincident with additional marketing (roadshow) Independent expert on each block report post seismic acquisition starting early Q3 – one per month Aggregate report end Q3
