Simba Signs Farmout Letter of Intent for Guinea Blocks 1 & 2
January 28 2014 - 9:00AM
Marketwired
Simba Signs Farmout Letter of Intent for Guinea Blocks 1 & 2
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan 28, 2014) -
Simba Energy Inc. (TSX-VENTURE:SMB)(FRANKFURT:GDA)(OTCQX:SMBZF)
("Simba") is pleased to announce that it has signed an exclusive
Letter of Intent (LOI) to farmout its Production Sharing Contract
(PSC) for Blocs 1 & 2 in onshore Guinea with a private investor
group (the Investor Group) based in Calgary, Alberta. The Investor
Group can earn up to a 45% interest in Simba's Guinea PSC with a
total investment of US$6,500,000.
Simba is an onshore pan-African oil and gas explorer with assets
in Kenya Guinea and Chad. The Investor Group includes some
participants from a group that recently signed the Kenya farmout
LOI with Simba (see January 8, 2014 news release).
The principal commercial terms of the farmout LOI are
highlighted as follows:
- After execution of the LOI, Simba will receive US$700,000 for
cost recovery.
- Upon completion of the Definitive Agreement(s), the Investor
Group will spend US$3,800,000 for an airborne FTG (Full Tensor
Gravity Gradiometry) survey that will cover a minimum of 9,000
kms2. This total initial expenditure of US$4,500,000 will earn the
Investor Group a 25% interest in Simba's Guinea PSC.
- The Investor Group has the option to earn an additional 20%
interest by carrying out a 2D seismic program with a minimum
expenditure of US$2,000,000 to bring the blocks to drill ready
status.
- Upon completion and interpretation of seismic results, both
parties mutually agree to either drill a first exploration well,
with each party responsible for its own share of costs, or; to
farmout the project to other third parties on mutually acceptable
terms.
Robert Dinning, President & CEO of Simba, stated, "This LOI
provides immediate recovery of expenses to Simba and accelerates
the completion of an FTG airborne survey. The LOI also provides the
Investor Group with an option to carry out additional seismic
surveys to support the selection of specific drill targets in
Guinea. The US$700,000 payment allows Simba to recover a portion of
its costs incurred in Guinea to date. This LOI and the pending
Definitive Agreement allows the Guinea project to advance while
Simba and its shareholders retain significant interests in Blocks 1
& 2. These blocks are highly prospective given the exploration
work completed to date by the Company and should provide Simba with
drill ready targets later this year. It is expected that the
Definitive Agreement(s) will replace the LOI before the end of Q1
2014."
Simba is off to a very positive start in 2014. Simba has now
signed farmout LOIs for its Kenya and Guinea PSCs worth an
estimated US$15.1 million in total, and Simba's management team is
working to sign further LOI's to farm out additional PSC's in the
first half of 2014.
Completion of the farmout is subject to normal Government
approvals and any required receipt of acceptance for filing by the
TSX Venture Exchange.
About Simba Energy:
Simba Energy Inc. is a Pan-African oil and gas exploration
company with active onshore PSCs in Kenya and Guinea and PSC's
under continuing negotiation in Chad, Liberia and Ghana. Simba
focuses on onshore oil and gas exploration in areas that are under
developed or not previously exploited.
Simba's objective is to establish itself as a diversified
international explorer and developer with a growing oil and gas
acreage position that deliver significant upside potential for
shareholders.
ON BEHALF OF THE BOARD
Robert Dinning, President & CEO.
We seek safe harbor.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This News Release may contain forward-looking statements
based on assumptions and judgments of management regarding future
events or results that may prove to be inaccurate as a result of
exploration and other risk factors beyond its control, and actual
results may differ materially from the expected results.
Simba Energy
Inc.604-641-4450info@simaenergy.cawww.simbaenergy.caSimba Energy
Inc.Mark SommerToll Free: 1-855-777-4622
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