Sintana Energy Inc (TSX-V:SEI, OTCQB:SEUSF) has snapped up a stake in some the of last remaining acreage in Namibia’s Orange basin hotspot, acquiring a material interest in the PEL 79 licence block located to the east of the ‘world-class’ Mopane discovery.
The Canadian exploration company holds around 5% of Galp-operated Mopane, which was confirmed as a significant commercial discovery by the Portuguese firm earlier this week.
Now, today, Sintana has executed an agreement with Crown Energy, a private Namibian company, to acquire up to 67% of Giraffe Energy Investments (Pty) Ltd, a vehicle which in turn owns a 33% stake in PEL 79 alongside state-backed oil company Namcor.
Initially, Sintana is paying $2 million to acquire 49% of Giraffe and can increase the stake to 67% over the next five years for a further $1 million payment.
The deal is described by Sintana as “an attractive entry into a high-impact license with significant upside”.
“Together with our partners at QXI and Giraffe, we look forward to working with NAMCOR to fully realize the significant geologic, commercial, and strategic value of PEL 79,” Sintana chief executive Robert Bose said in a statement.
Mark Stearnes, chief executive of Quantum Xploration Inc (QXI), meanwhile, commented: “As the Orange Basin continues to deliver outstanding exploration success, we are delighted to work with Sintana and Crown to enhance the technical and operational capabilities at Giraffe.
“We look forward to supporting NAMCOR with their continuing efforts to unlock the full exploration potential of this highly prospective license.”
Stearnes was Galp’s asset general manager in Namibia from 2017 and 2023, a role which saw him lead upstream operations in country including on PEL 83, which hosts Mopane.
Through an emerging partnership with QXI, Sintana expects to deepen its technical, operational and in-country capabilities in Namibia.
The partnership positions the company for additional opportunities and growth, the company highlighted.
Mopane breakthrough
Sintana shares are up around 90% over the past week, driven by the outstanding well test results announced by Galp on Sunday.
Mopane confirmed as “world-class” by tests conducted by project operator Galp.
Flows from the Mopane-1X well hit the maximum limit of 14,000 barrels oil equivalent per day in a test.
Galp described Mopane as "potentially an important commercial discovery."
The Portuguese company reckons the discovered Mopane complex alone could contain hydrocarbon in-place in excess of 10 billion barrels of oil equivalent. It also sees possible additional exploration and appraisal wells in the project’s vicinity.
“All acquired data from the current Mopane drilling campaign will be analysed and integrated into an updated reservoir model. The model will serve as the basis to refine Galp’s near-term drilling plan to further explore, appraise and develop the wider Mopane complex,” it said on Monday.
Sintana boss Robert Bose, meanwhile, said: “The results of the initial exploration campaign on PEL 83 are a true milestone for all stakeholders including the people of Namibia, our local partners and Sintana.
“We are thrilled to be a part of this world-class discovery.”