Simba Energy Signs Exclusive Letter of Intent for Farmout of Block 2A in
VANCOUVER, British Columbia -- January 8, 2014
Simba Energy Inc. (TSXV: SMB, Frankfurt: GDA, OTCQX: SMBZF) (“Simba” or the
“Company”) is pleased to announce that it has signed an exclusive letter of
intent (the “LOI”) with a private group (the “Group”) based in Calgary,
Alberta to farmout up to 40% of Simba’s interest in the Production Sharing
Contract (PSC) for Block 2A, onshore Kenya, for a total commitment of US$8.6
The principal commercial terms of the farmout are highlighted as follows:
*US$2.0 million for cost recovery will be placed in trust immediately upon
signing of the definitive agreement. These funds will be released to Simba
once the farmout agreement is approved by the Kenya Government. This
payment for cost recovery will entitle the Group to a 10% interest in the
*Simba will be carried through the funding and completion of US$6.6 million
in exploration work to include a minimum of 421 line kilometers of 2D
seismic that is to be carried out in 2014.
*In total, the Group will earn a 40% interest in Simba’s Kenya PSC upon
payment of the US$2.0 million and completion of the US$6.6 million work
*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 farm out to other third
parties on mutually acceptable terms.
Robert Dinning, CEO of Simba, stated, “This LOI provides a fully funded and
accelerated exploration program through to selecting drill targets and allows
Simba to recover US$2.0 million in costs upon completion of the definitive
agreement and host Government approval. The Company and its shareholders
retain significant interest in Block 2A. This block is highly prospective
given the exploration work completed to date by the Company and exploration
activities underway by neighbouring energy companies, including: Tullow,
Africa Oil, Marathon, Afren and Taipan on the adjacent blocks to 2A in the
Anza basin. The Anza basin is one of the largest Tertiary-age rift basins in
East Africa. We expect the definitive agreement to be signed in Q1 2014 - and
for the 2014 work program to begin thereafter.”
Completion of the farmout is subject to normal host Government approvals and
receipt of acceptance for filing by the TSX Venture Exchange.
The Company and the Group have exchanged drafts of a second letter of intent
in reference to the Company’s concessions in Guinea. This second letter of
intent defines the intention of the parties to enter into a second farmout
agreement that will define the Group’s participation in Simba’s concessions in
Guinea. This second letter is expected to be signed before month end January
About Simba Energy:
Simba Energy Inc. is an independent Canadian-based oil and gas exploration
company with active onshore PSCs in Kenya, Guinea and Chad. Simba is exploring
and developing onshore oil and gas prospects in under explored regions across
ON BEHALF OF THE BOARD
"Robert Dinning", President & CEO.
For further information contact: Ph. 604-641-4450, or visit:
www.simbaenergy.ca , or email: firstname.lastname@example.org, or Mark Sommer, Toll Free:
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.
To view this press release as a PDF, please click on the following link:
Simba Energy Inc.
Mark Sommer, Toll Free: 1-855-777-4622
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