SOMALIA � Africa Oil finds key backers �����The Canadian company has struck agreements with mysterious Arab investors in order to explore blocks in Puntland.
On June 8, with the blessings of its shareholders, Africa Oil Corp will officially become owner of the assets of Lion Energy Corp active in Kenya and Somalia. While the operation will enable the Canadian company to increase its holding on the 10BB license in Kenya, it also considerably boosts its stake - and thus is commitments - in Puntland.
To be sure, the acquisition of Lion will increase Africa Oil�s holdings on the two onshore blocks of Dharoor and Negal from 45 to 60%. As a result, Africa Oil�s bosses sought and found unnamed investors for Puntland in the Middle East. The backers agreed to put up money but won�t take a direct stake in the blocks.
Indeed, Africa Oil has chosen to reactivate an old, unlisted company that it owns, Denovo Capital Corp., to house its assets in Puntland. Denovo will quickly set up a subsidiary named Puntland Petroleum Corp and sell off part of its business to new investors. Once that operation is completed Africa Oil will control just 32% of the two fields and its Middle East partners 28%.
The arrangement will allow Africa Oil to avoid dipping into its own coffers too deeply. The other companies present on the two Puntland blocks are Australia�s Range Resources Ltd, with 20%, and Red Emperor Resources NL with 20%.
Under an accord with the Puntland government, a first well must be started on one of the two blocks by July, and a second by the end of the year. After the two wells in Puntland, the rig will move to Ethiopia for an operation in the Ogaden region where Africa Oil works in partnership with Tullow Oil. --------------------------------------------------------------------------------
RMP Price at posting:
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