Wentworth Resources, the East Africa-focused oil and gas company, is set to boost its interest in the Mnazi Bay concession, offshore Tanzania, through a swap deal with Cove Energy.
The transaction will see Wentworth terminate its 4.95% royalty interest from Cove's share in the Rovuma Area 1 Concession.
In addition, Cove will receive two million new shares in Wentworth, and a payment from Wentworth of up to $8.5 depending on natural gas production rates.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The total value of the transaction is approximately $38.8m.
Following completion Wentworth will hold a 41.78% interest in Mnazi Bay, Maure & Prom will hold 38.22% and the Tanzania Petroleum Development Corporation 20%.
The Executive Chairman of Wentworth, Bob McBean, says the transaction is a boon to both Cove and his own firm, describing it as a "win situation for both parties".
News of the deal saw Wentworth's shares gain 0.9% by 10:39.
BS
