Swala Oil and Gas (Tanzania) Public Limited Company Unaudited interim Financial Statements for the period ended 30 June 2015
OPERATING AND FINANCIAL REVIEW
Performance for the year
The results of the Company's operations for the year are set out on page 8.
In 2014, Swala committed to entering Years 3 and 4 exploration phase of the Initial Exploration Term in both its Pangani and Kilosa – Kilombero PSAs licence areas. The work commitment in each licence during this period includes additional 2D seismic acquisition in the third contract year and drilling of one exploration well in the fourth contract year.
The Company completed the seismic acquisition programmes in the Kilosa-Kilombero and Pangani licenses to the satisfaction of the exploration work commitment programme for the third contract year. During the period, the company engaged in seismic processing and full evaluation of the seismic data for the purpose of identification of drilling leads, prospects and location on the licences. Seismic processing and full evaluation of the seismic data has been completed with the identification of Kito prospect as a drilling candidate in the Kilosa – Kilombero licence and Kikuletwa leads in the Pangani Licence. The company expects to drill wells in 2016.
During the period, the company entered into a farm-out agreement with TATA Petrodyne Limited (TPL) (wholly-owned subsidiary of the TATA Sons of India) for a proposed transfer of 25% participating interests in each of the Pangani and Kilosa Kilombero PSAs. According to the PSAs, the proposed transaction is subject to government consents.
Upon receipt of the government consent and subject to the provisions of the farm-out agreement, Swala and TPL shall sign deed of assignment to transfer 25% participating interests in each of the Pangani and Kilosa Kilombero PSAs to TPL, in exchange for US$ 1.79m towards the past costs and up to US$ 2.1m future costs of drilling a commitment well in the Pangani licence, and US$ 3.9m towards the past costs and up to US$ 2.5m future costs of drilling a commitment well and up to a further US$1m costs of drilling a second well (contingent) in the Kilosa-Kilombero Licence.
Further details can be obtained from the link below