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Octant Energy set to secure African assets; closes US$9mln of financing

Thursday, April 6, 2017 10:09
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(Before It's News)

Octant Energy Corp (CVE:OEL, NEX:OEL) said its deal to buy oil assets in Kenya and Tanzania is expected to be finalised within the next two weeks and revealed it had closed the second tranche of  its debenture financing for US$9mln.

In late 2015, the firm agreed a deal to acquire the assets from subsidiaries of Afren Plc (LON:AFR) and it has now, significantly, received Kenyan government approval for the transfer of these assets.

The Kenyan assets include the so-called block L17/L18 and block 1.

Block L17/L18, in which the vendor has a 100% interest, lies in the Lamu coastal basin and both L17 and L18 cover an area of around 1,275 sq km and 3,630 sq km respectively.

They are both onshore and in water depths varying from a few meters along the shoreline up to around 500 metres.

Kenya Block 1 is on the western margin of the Mandera-Lugh basin and spans an area of 22,250 sq km. The vendor’s working interest is 80%.

Octant is also pursuing the Tanga Block in Tanzania, in which the vendor has a 74% interest. An updated timeline for a closing of the Tanga Block is not currently available.

As reported last month, Octant is arranging a US$10mln financing and entered into a term sheet with Rosseau Asset Management (RAM).

The financing will carry 8% interest per year and the first tranche (of US$1mln) will be used to complete the acquisition of the Tanga Block, it had said.

Now the second tranche of US$9mln has been completed. RAM can  convert the principal at U$0.075 per share at any time up to March 8, 2021.

Story by ProactiveInvestors


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