Canadian oil & gas firm widens its footprint in Namibia’s prolific Orange Basin

Canada-headquartered oil and natural gas exploration player Sintana Energy is entering a new license off the coast of Namibia, thanks to a deal with Crown Energy, a Namibian company, for the acquisition of a stake in Giraffe Energy Investments. This will enable the Canadian firm to expand its exposure to the African country’s Orange Basin, which is emerging as the world’s next hydrocarbon province. 

Sintana Energy’s definitive agreement with Crown Energy will enable it to get up to 67% of the issued and outstanding shares of Giraffe Energy, which is the owner of a 33% interest in petroleum exploration license 79 (PEL 79), governing blocks 2815 and 2915 located inboard of blocks operated by BW Energy, Rhino Resources, and Shell in Namibia’s Orange Basin.

According to the Canadian player, the acquisition is structured as an initial purchase of 49% of the issued and outstanding shares of Giraffe from Crown Energy for a cash consideration of $2 million, which the firm proposes to fund from resources on hand. 

However, Sintana also retains an option to boost its ownership of Giraffe up to 67% anytime over the five years following closing based on the shares issued and outstanding at the time of the option exercise for an additional cash payment of $1 million. 

This acquisition is subject to the satisfaction of various closing conditions and the receipt of all applicable approvals, including the approval of the TSX Venture Exchange. The National Petroleum Corporation of Namibia (NAMCOR) is currently the operator of PEL 79 with a 67% interest.

Sintana believes this license presents “a unique opportunity” to bolster its presence in Namibia’s Orange Basin, as this is one of the last remaining licenses not operated by a private operator. Currently, the emerging regional exploration dynamic is focused on oil prospectivity.

This is hammered home by BW Energy, which acquired 4,600 square kilometers of new 3D seismic in 2023 over PEL 3, located directly west of PEL 79, and has moved to initiate an oil-focused exploration campaign.

Moreover, Rhino Resources, operator of PEL 85 which sits directly outboard to the west of the southern reach of PEL 79, is progressing with the planning and contracting for a two-well campaign. This may be expanded further to an application to drill up to ten wells.

Sintana claims that the existing 2D and 3D coverage supports a material prospect inventory, with recent discoveries, including at Mopane, providing opportunities to deploy new approaches and new insights on potential.

Robert Bose, CEO of Sintana Energy, commented: “We are pleased to announce the potential expansion of our Orange Basin platform through the acquisition of a significant stake in Giraffe Energy. Together with our partners at QXI and Giraffe, we look forward to working with NAMCOR to fully realize the significant geologic, commercial, and strategic value of PEL 79.”

In line with this, the Canadian firm is convinced that its license acquisition associated partnership with Quantum Xploration (QXI), led by Mark Stearns who was previously Asset General Manager for Galp Energia from 2017 to 2023, deepens its technical, operational, and in-country capabilities in Namibia, positioning it for additional opportunities and growth.

“As the Orange Basin continues to deliver outstanding exploration success, we are delighted to work with Sintana and Crown to enhance the technical and operational capabilities at Giraffe. We look forward to supporting NAMCOR with their continuing efforts to unlock the full exploration potential of this highly prospective license,” highlighted Stearnes.   

In conjunction with the acquisition, an 8% interest in Giraffe’s common equity will be contributed to a community trust, initiated and supported by the Knowledge Katti Foundation. This contribution is expected to establish the first vehicle of its kind in Namibia, providing a direct mechanism to bring the benefits of the oil and gas industry to local communities.
  
Knowledge Katti, Founder of the Knowledge Katti Foundation, remarked: “The Knowledge Katti Foundation is proud to play an instrumental role in this initiative ensuring that local communities, initially in Erongo and then expanding to include Karras, are participants in the benefits and outcomes of the oil and gas industry as Namibia emerges as one of the world’s great hydrocarbon provinces.”