London: 21 December 2018
Impact is delighted to support Main Street (see “Financing Arrangement” below) a BEE company, in the exploration of the Paddavisie fairway, led by Total as Operator. Much of Impact’s own southern Africa exploration portfolio, from the Tugela South licence in the Durban Basin to Namibia Block 2913B, is focused on this play: middle Cretaceous deep marine sands lying in large stratigraphic traps and sourced with oil from world-class Aptian source rocks.
On 19 December, Deepkloof and Africa Oil Corp each gave notice to exercise 50,343,961 warrants at a price of 18 pence per share realising USD 23.1 million. In addition, Impact intends to raise approximately USD 12.6 million through the combined placing of approximately 40 million new ordinary shares at a price of 25 pence per share, being made equally to Deepkloof Limited and Africa Oil Corp in January 2019.
Post-completion of the placing and exercise of warrants, the Company will have raised a total of approximately USD 35.7 million, with Deepkloof and Africa Oil Corp holding approximately 49% and 30%, respectively, of the issued share capital in the Company.
Block 11B/12B
Block 11B/12B is located in the Outeniqua Basin approximately 175 kilometres off the southern coast of South Africa. The block covers an area of 18,734 square kilometres with water depths ranging from 200 to 2,000 meters.
The Brulpadda Prospect has been defined utilising a 2D seismic survey acquired in 2005.
Total expects to drill the Brulpadda-1AX exploration well in the coming weeks to test the Brulpadda-1AX prospect within the southern Outeniqua Basin. The well will be drilled in 1,432 metres of water by the Odfjell Drilling Deepsea Stavanger semi-submersible rig to a total depth of 3,420 metres subsea. The well will test the oil potential in a mid-Cretaceous aged deep marine fan sandstone system within a combined structural / stratigraphic closure. It is expected to take approximately 85 days to drill and evaluate.
Total is Operator and holds a 45% participating interest, with Qatar Petroleum holding 25%, CNRI 20%, and Main Street 10%. Main Street is described below.
Financing Arrangement
Arostyle (a Black Empowered company) owns 51% of the shares in Main Street ( which is also Black Empowered), which has entered into farmin agreements for an aggregate 10% participating interest in Block 11B/12B. The farm-in was completed on 19 December 2018.
Impact has advanced funding to Arostyle to enable Arostyle to fund its proportionate share of Main Street’s farmin to Block 11B/12B. At closing of the farm-in, Arostyle’s aggregate share of the Main Street transactions totalled USD 17.2 million. The funding from Impact will also support Arostyle’s share of Main Street’s initial, up-coming, exploration commitments including the Brulpadda-1AX well, working capital, contingencies and certain other geological and geophysical costs. Should this prove successful, the financing terms allow for Impact to support Arostyle’s contribution to BEE Main Street’s share of further appraisal costs. Impact will receive a return on the financial loan granted to Arostyle, which is representative of its corresponding financial exposure.
“Today’s transaction supports Arostyle to enable participation of Main Street in one of the most exciting frontier exploration wells in Africa.
The Brulpadda-1AX well will be the first exploration well in which Impact is associated, through its financial support of Arostyle and corresponding support of Main Street. Furthermore, as a partner, Impact is participating directly in the Venus-1 well during 2019 in Block 2913b in Namibia, also to be drilled by Total.”