Sintana Energy’s management says it would be open to selling its exposure to petroleum exploration licence 83, which is the site of the massive Mopane oil discovery.
Sintana is a Canadian oil exploration company with an indirect interest in six petroleum exploration licences (PELs) through its partial ownership of companies owned by Namibian businessman Knowledge Katti.
Speaking to media platform ‘Directors Talks’ in May, Sintana chief executive Robert Bose said the company would “absolutely” be willing to sell its Mopane interests.
“We remain ever vigilant of the risk-adjusted value and retention value of our interests and assets, and if someone is willing to pay in excess of that, I think it suits us to take a look at that seriously,” he said.
Bose said Sintana’s business model is to buy into assets earlier and then sell at higher prices when the value of those assets has been realised.
He, however, reminded potential investors that Sintana holds an indirect interest in PEL83 through a holding company – Inter Oil (Pty) Ltd – in which it is a minority investor.
Inter Oil’s majority owner is Katti, who also owns shares in Sintana and who is a non-executive director of the company.
Bose spoke to ‘Directors Talks’ on 29 May after Sintana finished a capital-raising round of N$190 million.
Asked what the capital would be used for, Bose said it was primarily to extend Sintana’s footprint in Angola and Namibia.
“The predominant use is to participate in the upcoming exploration campaign, which will be led by Chevron on an asset called PEL90,” Bose said.
Chevron is expecting to start drilling a well on the licence – which is directly west of Mopane – later this year.
“We had exploration carry on that licence. That has since been fully utilised, so we are looking forward to deploying a relatively small amount of capital on what could potentially be a very large outcome on PEL90,” Bose said.
‘Exploration carry’ means the company does not have to contribute to upfront exploration costs.
The major company ‘carries’ the smaller companies’ share of the costs. These agreements can be capped at a certain financial or percentage limit.
The company will also use the capital raised to complete their entry into the Angolan market and potentially to complete a transaction with Paragon Oil and Gas for PEL 37 in the Walvis Basin.
“Earlier in the year we announced a potential expansion of our Walvis Basin footprint. Our licence in the Walvis Basin, that is currently in our portfolio, is operated by Chevron. We have an option on an adjacent block, which will give us significant additional exposure to what we expect to be Namibia’s next big offshore province,” Bose said.
Sintana president Eytan Uliel discussed the company’s activities in Uruguay, where it holds an interest in two oil exploration areas.
