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.
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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.
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