Oil and gas exploration company, 88 Energy, has signed a farm-in agreement with Monitor Oil and Gas Exploration – a subsidiary of U.K. private exploration company, Monitor Exploration – to earn up to a 45% non-operated working interest in Namibia’s onshore Petroleum Exploration License (PEL) 93.
The activity program for the three-stage agreement will involve the acquisition of approximately 200-line-kilometers of low-impact 2D seismic data in mid-2024, along with a potential initial exploration well targeting the Damara gas play in 2025.
Under stage one of the agreement, 88 Energy will make an initial payment of $3.7 million to acquire a 20% stake in PEL 93. In the second stage, the company will up its interest to 37.5% through an additional payment of $7.5 million towards the first well gross costs, which are estimated at $12 million. The first well is expected to spud by the first half of 2025.
Meanwhile, the company will have the option to fund the first $12 million of the second well’s gross costs for an additional 7.5% working interest in the license. This acquisition is poised to bring 88 Energy’s aggregate stake in PEL 93 to 45%, with the potential to transition to project operator in the future.
“PEL 93 provides a logical expansion of 88 Energy’s existing portfolio, with similar scale and potential that our shareholders are accustomed to,” stated Managing Director of 88 Energy, Ashley Gilbert. “The license includes an extensive lead portfolio which will provide an increased level of activity and value catalysts throughout the year.”
The agreement is subject to approvals by Namibia’s government and other regulatory bodies, which are expected by Q1 2024.
Covering an area of 18,500 km2 in Namibia’s onshore Owambo Basin, PEL 93 comprises Blocks 1717 and 1817. The license is currently owned and operated by Monitor Exploration with a 75% stake, while private Namibian company, Legend Oil Namibia, owns a 15% stake and state-owned NAMCOR holds the remaining 10% stake.