SacOil awarded Malawi Petroleum Prospecting Licence

JOHANNESBURG (miningweekly.com) – Shares in JSE-listed oil and gas company SacOil climbed 6.45% on Thursday as the firm announced that it had won an onshore petroleum-prospecting licence in Malawi.

SacOil was awarded 100% equity interest and operator status in Block 1, an area stretching 12 265 km² and the second-largest petroleum exploration licence demarcated in Malawi. It is located in the north-western part of the country, bordering Tanzania to the north and Zambia to the west.

SacOil said the licence, which was duly signed by Malawian Mining Minister John Bande, was located on trend with the East African rift system, which was a proven exploration province with prolific oil discoveries in Sudan, Chad, Kenya and Uganda. The company expects the same tertiary rift system to be present in Malawi.

The exploration licence’s term is divided into an initial four-year period, followed by two subsequent three-year renewal periods.

During the initial four-year period, SacOil plans to undertake desktop studies and the acquisition of gravity and magnetic data at a cost of $2-million to evaluate the petroleum potential of the block.

The company further stated that the licence dovetailed with its strategy of building a balanced upstream oil and gas portfolio through the acquisition of early stage opportunities in Africa, similar to that which it had already demonstrated in the Democratic Republic of Congo, where it was granted the 3 177 km² Block 3 prospecting licence in 2010.

“We are delighted at the award of the licence; it represents our firm commitment to grow our asset base on the African continent and drive shareholder value…it gives effect to our drive to unlock underexplored regions in Africa,” CEO Robin Vela said.

SacOil traded at 33c a share on the JSE on Thursday.

Source: Mining Weekly