Calgary, Alberta--(Newsfile Corp. - March 19, 2013) - Forest Gate Energy (TSXV: FGE) reports that it has entered into an option agreement to acquire a 49% percent interest in the future petroleum licenses known as the Central Block, North Block and Southern Block in the Republic of Cabinda (Angola).
The agreement is with Kilimanjaro Capital Ltd., a private Calgary-based company that acquires natural resource interests in emerging African nations. In consideration of the future contingency interest and subject to the lifting of the current cease-trade order over the securities of the company, Forest Gate, upon exercising its option, will issue 8 million shares to Kilimanjaro.
According to Kilimanjaro documents, these on-shore blocks abut highly productive off-shore fields blocks known as Block 0 and Block 14 operated by Chevron's Cabinda Gulf Oil Company (CABGOC).
ROC Oil, Sydney, Australia is a former Sonangol licensee that drilled a test well on the south block. (Sonangol is the Angolan Government oil and gas company). ROC Oil is no longer involved in Cabinda. According to Kilimanjaro, the Central and North Blocks are ready for development but security issues have held this back. The Cabinda area, in general, is largely unexplored for the same reason.
According to Sonangol, the Central Block “is located onshore Congo Basin adjacent to the prolific offshore Block O. The area size of the block is 1425 square kilometres. The previous exploration effort in this region was in the early 1960s. Numerous leads are recognized in Pre-salt Aptian (Chela), Barremian, (Toca, Vovo) and Neocomian (Lucula) intervals.
Cabinda is a former Portuguese Protectorate and was once known as the Portuguese Congo. In 1975, Cabinda attained independence but the oil-rich territory was invaded by Angola and a 38-year struggle has ensued. Cabinda’s current government of Aphonse Massanga and Premier Joel Batila has focused on civil and political remedies. In 2012, the African Union’s Banjul Commission took jurisdiction over the disputed claims to Cabinda’s largely dormant on-shore resources and has yet to issue a ruling.
The agreement is with Kilimanjaro Capital Ltd., a private Calgary-based company that acquires natural resource interests in emerging African nations. In consideration of the future contingency interest and subject to the lifting of the current cease-trade order over the securities of the company, Forest Gate, upon exercising its option, will issue 8 million shares to Kilimanjaro.
Kilimanjaro is the signatory of an Assignment Agreement with the Republic of Cabinda regarding petroleum rights, which becomes effective upon international recognition of the government of the Republic of Cabinda.
It is Forest Gate' second deal with Kilimanjaro and in Africa in three months. On January 30 of this year, Forest Gate announced that it had acquired 20 percent interest from Kilimanjaro in the petroleum and mineral rights in Southern Cameroons (Republic of Cameroon).
“This is another building block in our African-focused business plan,” said Michael Judson, Forest Gate’s President and CEO. “We are going to pursue other deals in Africa on a non-operated basis,” said Judson. ”We are planning to acquire additional options on licenses in unrecognized areas and look for operating partners to farm-in.”
In other company news, the company reports the resignation of director, Brian Weihs. "Brian felt that he was too busy with his own business to be able to devote the time and energy to Forest Gate that he wanted to do," Judson said. "Brian has helped steer the company through a very challenging period and environment. We appreciate his efforts greatly."
The agreement is subject to regulatory approvals.