Offshore oil and gas exploration continues to attract investment suitors
Canadian outfit, Windfire Capital Corporation recently signed an agreement to acquire exploration rights in two offshore oil blocks in Namibia.
The Economist learned that Windfire Capital this week announced it has signed a letter of intent with DMiner Asset Management Inc., pursuant to which Windfire proposes to acquire 91.5% of the issued and outstanding shares of Riviera Mina, a company incorporated under the laws of the Commonwealth of The Bahamas, from Dminer.
King Frans Indongo, a local partner and proposed director of Windfire, in a statement said, “This transaction is expected to result in another major investment in the Namibian oil and gas sector and demonstrates the confidence that a globally respected company like Windfire and its management team has in the immense potential for discovering oil or additional gas in Namibia.”
Riviera Mina indirectly owns a 76.5% interest in Petroleum Exploration License No. 0079 in relation to Blocks 2815 and 2915. The license is a strategically located offshore petroleum exploration license with extensive technical studies already concluded, including 1137 km2 of 3D seismic data covering a significant prospective resource, that offers a drill-ready, multiple-zone, oil and gas target in the Orange Basin off the southern Namibia coastline.
The remaining interest in the license is held by the National Petroleum Corporation of Namibia (Namcor) and local Namibian partners.
“We will work closely with our Canadian partners not only with the goal of finding oil in Namibia, but also in striving to ensure that we contribute to the advancement of the Namibian nation. Windfire brings capital expertise, leading technical experts with significant offshore discovery success, and a work programme to lead to oil development in our great country. With our international partners, Namibia is well positioned to realize its goal of energy independence,” Indongo added.
The Letter of Intent provides that, in consideration for the acquisition, Windfire will pay a non-refundable deposit of US$150,000 to DMiner, issue 15,000,000 ordinary shares of Windfire to DMiner, and pay an additional US$850,000 to DMiner to close the Acquisition.
The deposit will be paid after approval has been obtained from the Toronto Stock Exchange’s Venture Exchange. Under the Letter of Intent, the parties have also agreed to deal exclusively with each other until 29 December 2017, for the drafting of a definitive agreement either to finalise the Acquisition in termination of the Letter of Intent.
In connection with the Acquisition, Windfire intends to complete a private placement of subscription receipts for aggregate gross proceeds of up to US$5 million at a price of 25 UScents per subscription receipt or such other price and/or type of securities as may be mutually agreed to by Windfire and Dminer.
Upon the Closing, the management and board of directors of Windfire are expected to consist mainly of individuals who were directly involved in the completion of the C$730 million merger between UNX Energy Corporation and HRT Participacoes em. Petroleo S.A.
“It is an absolute pleasure to work once again with my colleagues from UNX as well as the new members of the team who all share a goal in making a significant oil/gas discovery in Namibia,” said Duane Parnham, a director of Dminer.
Parnham further stated “This transaction provides the shareholders of Windfire with the opportunity to participate in the enormous potential of what our team believes is the undrilled crown jewel in Namibia. We have always been committed to completing this transaction with Windfire and believe the timing is now ideal to proceed and complete this RTO.”
The Acquisition will constitute a reverse takeover of Windfire as defined under the policies of the TSX-V. Completion of the Acquisition remains subject to, among other things, satisfactory due diligence by the parties, entry into a definitive agreement, approval of the TSX-V, completion of the financing, approval of the applicable regulatory bodies in Namibia, and other conditions which are customary for transactions of this nature.