Written for best accuracy and fact. Please do your own research...

Written for best accuracy and fact. Please do your own research in case of errors. This is shared as an overview update (as much for me, as for readers), and not for the purposes of providing information to make financial decisions - Thank you.

Please post any factual errors....(which aren't obviously my opinion)
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***One Man’s Take***

http://www.swala-energy.com/

Leadership:

Excellent!!
Experienced and Proven. See http://www.swala-energy.com/corporate-directors.php

Research Links:

OPL = Target 29 cents
Latest
http://www.swala-energy.com/documents/SWE14-10-13.pdf

OPL Full report:
http://www.swala-energy.com/documents/OPLResearchNote31July2013.pdf

Argonauts = Valuation 81 cents, Target 57 cents
http://www.swala-energy.com/documents/SWE_TenForThePriceOfOne_Initiation.pdf

ONE discovery of 200-250 mmbbls = Above $6.00 per share!!

Look for Competent Persons Report for prospective analysis, after seismic is completed (end 2013/early 2014?) Not long to wait. (Note, this will only include Pagani & K-K)

Above valuations are without consideration to developments since they were published. Expect an upward valuation in time.

Since these reports we have seen many companies engaged in activities of farm outs, placements and raisings. Each one of these as far as I can see has been fully supported, and of very high value. Africa Oil being the latest with a $450 million (over-subscribed by $480 Million, or nearly 110%...see further down for more info), and Tullow Oil has just commenced a Senior Notes issue, which it increased from $500 million to $650 million)

Farm In/Out activity is also in the rise, and farm out companies are receiving multiple offers on what can be called excellent terms.
(Easily researchable)

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TANZANIA:
Partner: Otto Energy (ASX:OEL)
Operator: Swala Energy

License: Kilosa-Kilombero (K-K)
Asset: 32.5% indirect (via Swala Oil & Gas Tanzania Ltd)

We are now able to start breaking down our licenses into Basins, due to work having commenced….
Next we will be able to break them down into Targets and Leads :)

To date SWE has received complimentary feedback from Government regarding their methodology in conducting the activities.


KK Basins:

KILOSA:
130km of 2D completed.
Initial results indicate the presence of large structural traps with the potential to act as hydrocarbon traps.
Dr D quoted as saying “potential to contain Significant Structures”.

http://www.swala-energy.com/documents/1256740.pdf

KIDATU:
143kms of 2D completed.
Preliminary interpretation positive large scale structures and with a Major Intra-high on dip and strike lines. May be as large as 30 to 60 sqkms in size.

http://www.swala-energy.com/documents/PositiveresultsfromKidatuseismicsurvey.pdf

KILOMBERO:
2D seismic underway
Preliminary results due in short term


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License: Pagani (PAG)
Asset: 32.5% indirect (via Swala Oil & Gas Tanzania Ltd)

On one arm of the Northern Tanzanian Divergence triple junction. The rift is part of the East African Rift System that in the west, runs from Uganda to Malawi, and in the east from Kenya to Tanzania.

Over 2 billion barrels of oil has been found in the Lake Albert area, Uganda and recently oil was found in the Lokichar Basin in Kenya. The Pangani Rift is believed to contain sediments of Pliocene age, and possibly some Late Tertiary successions.

PAG Basins:

Mvungwe:
2D seismic to commence shortly, on completion of Kilombero

Moshi:
2D seismic to commence shortly, on completion of Kilombero


With the announcements to-date from the received results, I think there is merit in taking a closer look. The announcements state large structures etc….but I think many switch off once they see that (smiling) and forget to comprehend the information a little. What I note is the frequent use of plurals…and other leads, separate to the main context of the message being passed. I like this non-hyped reporting style….the information is there, you just have to see it.
Each basin so far is providing multiple potential targets is my take. Now equate this to each successful neighboring basin...What you get?

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TANZANIA (Under Application)

License: Eyasi-Wembere (Eyasi)
Asset: 32.5% indirect (via Swala Oil & Gas Tanzania Ltd)
Prospective Partner: PurVida (ASX:PVD)

Completion of negotiations expected in the near future.

Reviews of vintage gravity and magnetic data, together with surface geology investigations undertaken by Swala suggest that the Eyasi licence area may contain 4 separate basins with potential sediment thicknesses of around 3,000m (Figure 2). Each of these basins has an area of approximately 2,000 km², and has the potential to provide the source materials for hydrocarbon generation.

Swala believes the Eyasi licence to be a highly prospective area located on the southern extreme of the eastern branch of the East African Rift System (EARS) (Figure 1). The western branch of the EARS has already proven to be a major oil province with around 2 billion barrels of discovered oil in Lake Albert in Uganda. More recently the eastern branch has seen a number of oil discoveries announced in northern Kenya in the Lokichar basin where Tullow Oil (TLW: LSE) and Africa Oil (TSX.V:AOI) have recently been so successful with the Twiga South-1 and Ngamia-1 wells. These wells have now proven that prospective hydrocarbon basins lie within the eastern branch of the EARS.

The Lokichar basin is around half the size of each of Swala’s four separate basins in Eyasi.

http://www.swala-energy.com/documents/2013-06-14ExclusivenegotiationsEyasi.pdf

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Tanzania Corporate:

Swala Energy Tanzania Ltd (SOGTL)
SOGTL is in the final stages of listing on the EGM of the Dar es Salaam exchange.
This is anticipated to bring in 2-3 million dollars ($US).
Negligible dilution to Tanzanian assets
NIL dilution to non-Tanzanian assets!
But anticipate value to be added to SWE by increasing the value of SOGTL through investment and growth of Tanzanian O&G industry.

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Kenya:
License: 12B
Asset: 50% Direct
Partner: Tullow Oil
Operator: Tullow Oil

The Kenyan Government recently agreed to the reduction of seismic to 350kms (from initial contract of requiring 700kms). This not only implies that Tullow has narrowed the search, but will also save a decent amount of money.

Remapping underway, it is now anticipated the survey will commence 1st quarter 2014.
Modelling predicts up to 10% of 22 BILLION barrels may have been trapped. (see notes below)
Also referring to SWE’s latest 1/4erly, 12B may be the Hydrocarbon Source Kitchen. (pg4)

Field work investigating reports of oil contamination in water wells revealed the presence of thermogenic (naturally occurring) oil in a sample taken in proximity to a well at the Osodo Primary School

Reports of additional oil contamination remain to be investigated; however, the reports are coincident with boundary faults that define the edge of the basin – precisely where you would expect to find them (but this was not known prior the reports being made)

Gravity and magnetic data support the presence of a basin deep enough to generate hydrocarbons (up to 4kms)

Basin depth and delineation further supported by the legacy vintage seismic data and the recent passive seismic acquired by Tullow

Hydrocarbon charge modelling predicts up to 22b of oil may have been generated in the system (~10% of which may have been trapped)

Migration modelling predicts where this oil, if present, will travel and is coincident with bounding faults and reports of oil contamination

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Zambia:

SWE has 3 licenses under application.
Block 31
Block 42
Block 44

SWE will acquire ~83% of each and any license awarded.

A must read article:

http://www.postzambia.com/post-print_article.php?articleId=39180

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Other Items of interest / Benefit: (please note, this section contains a lot of my suppositions and assumptions, but is also based largely on fact or best known available information)

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SWE stands to leverage off the planned infrastructure being undertaken via multiple Governments and established Oil & Gas companies in the region. We also gain further leverage from our association with Tullow Oil, who is a major contributor to this planning.
Pipeline Construction
Refinery Capacity Increases
Road Transport for early production capabilities/logistics

The regional successes of Ngamia, Ekales, Ekuto and Twiga (amongst others) highlights the exceptional prospectivity of the region. Mulitple Hundreds of Million Barrel resources in each location, and still increasing with testing.

With Tullow Oil and Africa Oil highly active in the region, and neighbouring blocks, further good news only lends further upside to SWE.
With 24 drills scheduled for next year, with 6 rigs in operation…it’s surely conceivable that further successes will follow.
(And not forgetting Uganda’s huge discoveries of 1.2 + Billion Barrels)

I am still hopeful (note… desire not fact) that we may still see a wildcat drill in 2014 in one of our prospects….probably Kenya 12B?….Tullow seems open to wildcats as a part of its investment and exploration activities.

Corporate Social Responsibility is high on the agenda of both SWE and Tullow. This bodes well for local and government relations.

Our (SOGTL) listing on the EGM carries intrinsic value of cementing SOGTL as a true Tanzania Investment opportunity company, one in which small and large local investors can be a part of the growth…and subsequent benefits.

Our shareholder register could arguably be described as tight. With only 67 million tradable shares on offer until 2015….at/by which time we should have shored up some very nice targets and follow up leads, and be well on the way to drilling, if not already underway which lends credence to the assumption that good news will have a serious positive impact for the Share Price.

Of the tradable 67 million shares…how many of those are in safe hands….30 million, 40 million? (maybe less?)
Will any sharp upward movement cause a flurry on only 20 to 30 million shares?....

But on good news….at what price will those available 20 to 30 million shares be for sale?
Contemplating this is when I really get thinking of the potential!

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Attractiveness to Majors Oilers/Institution/Cash Heavy Private investors?...

Well I definitely believe we will be on the radar of some large money. Regionally we are centre stage, no doubt about that. With our escrowed shares, and shares held in the top 20...

http://www.swala-energy.com/documents/SWE_First-20-Investors-Report_201304121.pdf

...we appear to be safe from any “too cheap” aggressive take-over. A price would have to be negotiated… :)
~56% in Top 20
~44% the rest

Now if you look at this and consider the above….there might be lucky to get a 19.9% stake…..but that’s only if one entity can get all the available shares (tradable and not in safe hands)…..but that would cost them dearly I am sure :)…tradable does not say, at what price they would be sold…it just means “I will sell, but let’s talk how much”.
This to me again bodes well from us in the future, when drilling money is required.

With $7.7 million in the bank…..that’s probably some time away from being required…and will provide many options to Management. There is also a large amount of cash available, if the shares breach the options strike price of 30cents….9mil x 30cents = $2.7 million….add SOGTL listing cash 2-3 million US $ and we are looking VERY VERY strong.

An example:
(30 October 2013, Keith Hill of Africa Oil)
“I was a bit astonished how much money was being offered to us; you know more than double what we needed was being offered. I think that is a real endorsement that people are willing to invest in Africa. The money is coming from all over too: it’s coming from the Far East, it’s coming from Europe, it’s coming from North America. I think people are seeing Africa as one of the primary growth vehicles of the future and they are willing to invest in it,” Hill said.
Hill told How we made in Africa that Africa Oil was offered US$930m by investors when seeking funding while it only wanted to raise $450m.

http://www.howwemadeitinafrica.com/africa-oil-sees-interest-from-foreign-investors-in-east-african-oil-exploration/31897/

http://www.pehub.com/2013/10/29/chandler-corp-acquires-stake-vancouver-based-africa-oil-corp/

The below link shows the level of interest….Africa Oils placement for $450 million dollars, was SOLD OUT….LOL, in 2 HOURS and did so in RECORD TIME in doing so….and we already know about the $480 million over over-subscribed.

Remarkable and insane :)

http://translate.google.co.nz/translate?hl=en&sl=sv&tl=en&u=http%3A%2F%2Fwww.di.se%2Fstockwatch%2Fafrica-oil-corp%2Foverview%2F


Publicity:
Of the many, many websites now carrying SWE’s news and announcements and increasingly so, and conducting their own commentaries on the Company, and the company’s potential…

SWE’s presence and recognition is spreading, yet in its infancy and developments will increase this.
Headlines are starting to get quite catchy, and increasingly upbeat on the potential….soon or later…:)

Maybe time for a BRR interview soon??


In the Pipeline:
Malawi bids?
Other bids?
Other developments?


I hope this is of benefit for those interested.