Armour Energy granted exploration license in Uganda’s Kanywataba block
Australian explorer Armour Energy has been granted a two year exploration licence in the the Kanywataba Block in the Albertine graben bordering the Democratic Republic of Congo with the possibility of an additional two years subject to completing the work program for that period.
The production-sharing agreement with Armour Energy formerly operated by Total, CNOOC and Tullow Oil is part of the licences auctioned under the 2015 licensing round and covers 344 sq km.
The first period work program involves undertaking geological and geophysical works, reviewing existing data, reprocessing seismic data, and the acquisition of 100 line kilometres of 2D seismic. On completion of the work in the first period, the tenement can be renewed for a second 2 year period.
In the event that the tenement is renewed for the second 2 year program, the SPC will be committed to further expenditure on a minimum work program of undertaking geological, geophysical and geochemical studies plus drilling one exploration well.
Armour Energy will be in partnership with DGR Global Limited after the two companies entered in to an agreement over Armour’s application for the Ugandan Oil Project, ‘Kanywataba Block’.
Under the agreement the Kanywataba Block is to be initially granted to Armour, and subsequently placed into a Specific Project Company (SPC) for the purposes of the agreement, subject to Ugandan Government consent.
, Armour will retain 16.82% while DGR will meet the tenement expenditure and work program commitments for the first two year period and indemnify Armour for these costs. Until the transfer is completed, Armour shall hold DGR Global’s 83.18% interest in trust beneficially for DGR Global.
Armour and DGR Global will have pro‐rata entitlements to participate in new capital issues in the SPC.
DGR Global has agreed to spend up to:
- US$837,000 for a performance guarantee;
- US$442,000 to complete the grant of the licence; and
- US$1,980,000 exploration commitments over the first two years.