Sterling Energy has completed its farmout agreement with Jacka Resources for the acquisition of an additional 15% interest in the Production Sharing Contract for the Odewayne Block.
Holders for the block, which is located onshore in the Republic of Somaliland, are Genel Energy Somaliland, which controls 50% as operator, Sterling Energy, which controls 40% and Petrosoma, which controls the final 10%.
Sterling Energy chairman Alastair Beardsall said: “We are very pleased to have completed this transaction with Jacka for the Odewayne Block.
“We have built a material stake of 40% in the PSC and significantly lowered our cost of entry from $1m to $0.625m for each 1%.
“Under the initial Jacka and Petrosoma transactions, Sterling would have paid US$25m for a 25% interest; we will now pay US$25m for a 40% interest in the PSC.
“Our financial exposure during the third and fourth periods is limited to $8m future conditional payments under the Petrosoma transaction, all other exploration costs will be paid by Genel.
“We consider the Odewayne Block to be highly prospective and look forward to working with our joint venture partners in the exploration of this largely unexplored block.”
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