Sterling Energy and Petrosoma have agreed to revise the terms of the farm-out agreement between Sterling Energy (East Africa) Ltd. (SEEAL) and Petrosoma from October 2013 for the Odewayne PSA in Somaliland. The revised terms will reduce the amounts due by SEEAL to Petrosoma and reduce SEEAL’s interest in Odewayne by 6%.
Pursuant to the farm-out agreement, SEEAL purchased a 10% interest in the OdewaynePSA from Petrosoma. SEEAL purchased an additional 30% in other transactions withJacka Resources Somaliland.
The agreement included a future contingent consideration totaling $8million from SEEAL to Petrosoma.It has been amended so that the parties will cancel the $8million contingent consideration in return for: (i) a payment by SEEAL to Petrosoma of $3.5million; and (ii) a transfer from SEEAL to Petrosoma of a 6% interest in the PSA.
Completion of the transfer of the participating interest remains subject to approval of the government of Somaliland. Upon such approval, SEEAL will retain a 34% interest in the Odewayne Block, fully carried by Genel Energy for its share of the costs of all exploration activities during the third and fourth periods of the PSA.
SEEAL expects to launch a 2D seismic campaign on the Odewayne Block in Q2.