.. Empowering Stakeholders In East African Oil and Gas

Swala Energy cashes up with new JV ahead of Tanzanian drilling

imagesSwala Energy (ASX:SWE) has marked significant progress in its plan to unlock Tanzania’s prospective onshore oil acreage in recent weeks with fresh joint venture funding poised to prove up an exciting tenement portfolio.

The Perth-based explorer – which became the first oil and gas company to list a subsidiary on Tanzania’s Dar es Salaam Stock Exchange (DSE) last year –  secured US$5.7 million (A$7.8 million) in development funding earlier this month via a farm-in deal with Indian multinational conglomerate Tata Sons Limited (“Tata”).

The deal with Tata energy subsidiary Tata Petrodyne Limited (“TPL”) covers the Kilosa-Kilombero and Pangani licences in Tanzania, both located on a proven oil trend called the East African Rift System (“EARS”).

The transaction establishes an ownership structure whereby Swala controls 25% of both projects, with TPL controlling equal 25% stakes and Otto Energy (ASX:OEL) controlling the balance.

Besides funding exploration, the farm-in has allowed Swala the flexibility to redeem outstanding convertible notes worth $598,000. This stabilises the issued share capital of the company ahead of its planned corporate and asset activity in 2016.

The strategic benefits of the farm-in have made a dramatic impression on investors, resulting in Swala’s share price marking about a 77% increase since the first week of October.

 Dr. David Mestres Ridge, Swala CEO, said:

“Knowing that reimbursement of the past costs incurred by the Company is being made and having an international exploration company such as TPL as a participant in an exciting location in the East Africa Rift system allows us to now focus on preparations for the 2016 drilling campaign.”

Read:   Swala oil selects  Tanzania drilling site 

Projects of promise

The upcoming Joint Venture drilling will aim to improve confidence in two EARS projects, geologically related to structures which host at least 2 billion barrels of oil.

The Kilosa-Kilombero licence has three deep basins – Kidatu, Kilosa and Kilombero.  The Pangani licence has one – the Moshi basin.

Seismic work carried out in 2013 identified a large-scale structure in the Kilosa basin, measuring some 40-50km2 in extent. More importantly, it identified the “Kito” prospect in the Kilombero basin, where initial analysis suggested structural trapping analogous to that seen in Uganda (where more than 4 billion barrels of oil have been discovered to date) and Kenya (more than 600 million barrels).

A second seismic survey in 2014, concentrating on the Kilombero basin, slightly increased the size of the Kito prospect and identified a further six leads and prospects that contribute to the basin’s potential upside.

The 17,156-square-kilometre Pangani licence, meanwhile, has demonstrated the existence of in Moshi of a fault-bounded basin some 25 kilometres wide with sedimentary fill of between 2,000 -3,000 metres.  The Company is still reviewing the 2014 seismic data and focusing on the Kikuletwa lead, to the west of the basin.

Initial studies carried out by Swala earlier this year have clarified the operational issues associated with drilling in Tanzanianand confirmed estimated drilling costs below US$10 million (gross).

In Kenya, the company owns a 50% working interest in Block 12B, operated by Tullow Oil (LON:TLW).  The Operator is currently reviewing the seismic work acquired in 2014, which have already identified a number of leads and prospects.

Drilling is largely funded, with key partners including Tullow Oil (LON:TLW) and three wells slated for drilling on three licences in early 2016.

Ownership model

Swala’s listing on the DSE and relations with Tanzanian regulators represent part of a broader strategy of local integration which is at odds with the less inclusive business models of foreign listings practiced by some of the region’s large oil and gas operators.

This approach is based on a premise that early ownership brings value to local investors and further reinforces development prospects for the assets concerned.

Engagement with this strategy has encompassed a number of locally-focused marketing and communications efforts on the part of Swala, including:

• Commitment to local ownership, especially at the early seed stages.

– 2012 roadshows in Nairobi and Dar es Salaam

– 2013 roadshow in Dar es Salaam

• Commitment to local listing and close cooperation with the market authorities – many are very early-stage.

– Swala Tanzania listed in August 2014

– 2,000 Tanzanian shareholders

• Commitment to the communities in a meaningful manner (the trust concept).

– 7.5 million shares placed in trust

– Shares will be sold as appropriate and proceeds invested into the communities in which we operate

– ‘win-win’ with local communities: the more valuable the company, the more valuable the trust company tasked with investing locally.


Swala’s 77% share market turnaround in recent weeks despite the environment of a generally struggling oil and gas market is noteworthy and a solid indicator of the company’s potential versus its peers.

These catalysts most notably include the 2016 drilling campaign for the EARS projects.

Swala’s listing on the DSE shows that there is both the appetite and the ability to participate – at least in the early stages.

Swala’s holdings are predominantly in the world-class EARS area with a total net land package in excess of 9,000 square kilometres after the farm-in over Tanzania and Kenya.

New discoveries have been announced in a number of licences along this trend, including Ngamia, Twiga and Etuko, which extend the multi-billion barrel Albert Graben play into the eastern arm of the rift system. Swala has an active operational and business development programme to continue to grow its presence in the promising hydrocarbon provinces of Africa.

To date, over 2 billion barrels of oil have been discovered in the Albertine Graben of Uganda. More recently, there have been oil discoveries in the Ngamia -1 and Twiga-1 wells in Kenya.

These discoveries have provided compelling evidence that the presence of oil in the rift systems is geographically more extensive than previously thought.

Work to date by Swala has identified key prospects with strong similarities to the recent EARS discoveries.

Tanzania’s gas reserves have been estimated to total between 50-53Tcf.

Swala’s business model is to have ownership from the get go. With this strategy, it is seeking to emulate proven African energy company success stories from the likes of African Oil (ASX:AOI), Cove Energy and Tullow Oil.

Swala has adopted a prudent farm-out strategy, whilst retaining interests that provide leverage to any drilling success.

The uptick in share price provides a counter to participate in the 2016 exploration well to be drilled on the Kito prospect in the Kilosa-Kilombero licence. We would expect to see ongoing interest and further investor participation in the lead up to this very exciting exploration and drill program commencing.

With the redemption of outstanding convertible notes, this will remove an overhang of shares that should provide clearer air for the stock and potential to track considerably higher than current share price of $0.077 in 2016.



Add a Comment
  1. I just want to tell you that I am just newbie to blogging and seriously loved you’re blog site. Very likely I’m likely to bookmark your website . You amazingly have outstanding articles and reviews. Kudos for sharing with us your web-site.

  2. Everybody Hates Chris sometimes bores me because the jokes aren’t so funny anymore but i still watch it all the time,

  3. Its like you read my mind! You seem to know a lot about this, like you wrote the book in it or something. I think that you can do with some pics to drive the message home a little bit, but other than that, this is magnificent blog. A fantastic read. I’ll definitely be back.

  4. It is truly a great and useful piece of info. I am happy that you shared this useful info with us. Please keep us up to date like this. Thank you for sharing.

  5. hi!,I really like your writing so so much! proportion we keep up a correspondence extra approximately your post on AOL? I need an expert in this house to unravel my problem. Maybe that’s you! Looking forward to peer you.

  6. I really like your writing style, good information, thank you for posting :D. “If a cluttered desk is the sign of a cluttered mind, what is the significance of a clean desk” by Laurence J. Peter.

  7. Pretty nice post. I just stumbled upon your weblog and wished to say that I’ve really enjoyed browsing your blog posts. In any case I’ll be subscribing to your rss feed and I hope you write again soon!

  8. You actually make it seem so easy with your presentation but I find this topic to be actually something that I think I would never understand. It seems too complex and very broad for me. I’m looking forward for your next post, I’ll try to get the hang of it!

  9. If you are continue to upon the fence: grab your favorite earphones, intellect down towards a Suitable Order and talk to in the direction of plug them into a Zune then an iPod and watch which a person appears better toward oneself, and which interface tends to make oneself smile more. Then you can know which is directly for yourself.

  10. I like the valuable info you provide in your articles. I’ll bookmark your blog and check again here frequently. I am quite sure I’ll learn many new stuff right here! Good luck for the next!

  11. An attention-grabbing discussion is value comment. I believe that you need to write extra on this matter, it may not be a taboo topic however typically people are not sufficient to speak on such topics. To the next. Cheers

  12. I like what you guys are up too. Such intelligent work and reporting! Keep up the superb works guys I have incorporated you guys to my blogroll. I think it’ll improve the value of my website 🙂

  13. There is perceptibly a bunch to know about this. I feel you made certain good points in features also.

  14. If you are continue to upon the fence: seize your most loved earphones, head down in the direction of a Most straightforward Acquire and check with in the direction of plug them into a Zune then an iPod and view which one particular seems far better in the direction of your self, and which interface helps make by yourself smile further more. Then you can expect to recognize which is instantly for oneself.

  15. Excellent read, I just passed this onto a colleague who was doing a little research on that. And he just bought me lunch because I found it for him smile Thus let me rephrase that: Thank you for lunch!

  16. I’ve read several good stuff here. Definitely worth bookmarking for revisiting. I wonder how much effort you put to make such a great informative web site.

  17. I’ve been absent for some time, but now I remember why I used to love this blog. Thanks , I¡¦ll try and check back more frequently. How frequently you update your website?

  18. You made some good points there. I looked on the internet for the subject and found most people will approve with your site.

  19. I am not sure where you are getting your information, but great topic. I needs to spend some time learning much more or understanding more. Thanks for great information I was looking for this information for my mission.

  20. You made some clear points there. I looked on the internet for the issue and found most guys will agree with your site.

  21. I’ll immediately take hold of your rss as I can’t to find your e-mail subscription link or newsletter service. Do you’ve any? Please permit me realize in order that I may just subscribe. Thanks.

  22. The Zune concentrates on being a Portable Media Player. Not a website browser. Not a match machine. Perhaps inside the long run it’ll do even far better inside all those areas, nevertheless for at present it really is a Great way to arrange and listen in the direction of your tunes and motion pictures, and is with out peer within that regard. The iPod’s advantages are its world wide web visiting and purposes. If individuals good extra compelling, maybe it is your easiest option.

  23. I have been browsing online more than 3 hours today, yet I never found any interesting article like yours. It is pretty worth enough for me. Personally, if all webmasters and bloggers made good content as you did, the net will be a lot more useful than ever before.

  24. Thanks a lot for sharing this with all of us you really recognize what you’re speaking approximately! Bookmarked. Kindly additionally visit my website =). We will have a hyperlink exchange agreement among us!

  25. The refreshing Zune browser is incredibly good, yet not as favourable as the iPod’s. It performs very well, however is just not as instant as Safari, and consists of a clunkier interface. If oneself from time to time software on applying the web browser that is not an issue, yet if you are creating to read the world-wide-web alot against your PMP then the iPod’s much larger exhibit and superior browser may be essential.

  26. Sorry for the substantial research, still I’m seriously loving the clean Zune, and assume this, as very well as the excellent evaluations some other humans have published, will support by yourself make a decision if it can be the instantly preference for yourself.

  27. Thank you for publishing this awesome article. I’m a long time reader but I’ve never been compelled to leave a comment. I subscribed to your blog and shared this on my Twitter. Thanks again for a great article!

  28. Thank you for writing this awesome article. I’m a long time reader but I’ve never been compelled to leave a comment. I subscribed to your blog and shared this on my Facebook. Thanks again for a great post!

  29. If you’re however upon the fence: grab your favourite earphones, head down in direction of a Great Buy and ask toward plug them into a Zune then an iPod and view which a person seems improved towards by yourself, and which interface would make on your own smile a lot more. Then you may comprehend which is straight for oneself.

  30. If you might be however upon the fence: get your favorite earphones, head down in direction of a Excellent Buy and question towards plug them into a Zune then an iPod and watch which a person seems greater in the direction of yourself, and which interface can make you smile further. Then you can expect to realize which is straight for yourself.

Leave a Reply

Your email address will not be published.

Time limit is exhausted. Please reload CAPTCHA.

Tanzania Petroleum © 2016-2017.