Swala Oil & Gas, a company working to buy a stake in a block offshore Tanzania, has said that trading of its securities listed on the Dar es Salaam Stock Exchange (DSE) in Tanzania will be halted.

    Orca Exploration, the company selling the stake in the Songo Songo offshore block, said last Friday that Swala securities trading would be halted per request of Swala, pending an announcement regarding third-party equity investment in Swala.

    According to Swala, unless the DSE decides otherwise, the securities will remain halted until the start of normal trading on Monday, August 6, or when the Swala investment announcement is released to the market.

    Orca said Swala would use any funds raised through the equity investment and a planned $50 million corporate bond issue (pending regulatory approval) to fund tranches 2 and 3 of the previously announced $130 million investment in PAE PanAfrican Energy Corporation, a subsidiary of Orca.

    The tranche 1 sale, representing 7.93% of a potential sale of 40% of PAEM, closed on January 16, 2018.

Songo Songo Block

    To remind, the closing of tranches 2 and 3 was extended three times with the last investment coming in early July. It followed the first extension in early April and the second in mid-May.

    When completed, the investment will give Swala part ownership of PAE’s Tanzanian subsidiary, which owns exploration and production rights for in the Songo Songo block. PAE Tanzania holds the block in partnership with the Tanzania Petroleum Development Corporation.

    The Songo Songo gas field within the license is positioned on and slightly offshore the Songo Songo Island. The main reservoir is developed in Lower Cretaceous aged Neocomian to Albian sandstones, while Upper Cretaceous aged Cenomanian sands that lie unconformably on the Lower Cretaceous will provide an additional reservoir when developed. The field first started production in 2004.

    The initial negotiations between the two companies were officially revealed back in August 2017, and then, in January 2018, Swala announced the financial terms and the payment of the first $25 million tranche.

    Through its subsidiaries, Orca operates one license in Tanzania which comprises two blocks. The blocks are located in shallow water approximately 15 kilometers off the coast and 200 kilometers south of Dar es Salaam.