Jacka told the Australian Securities Exchange on Monday that it had signed a farm-out agreement to transfer operatorship and 50% equity in the Odewayne Block to Genel.
Under the deal, Jacka (which will retain a 30% working interest) and block partner Petrosoma (which will hold the remaining 20% stake) will be free carried by Genel through a work programme including a minimum 1500 kilometres of 2D seismic and the drilling of an exploration well.
Jacka said phases three and four of the work programme, including the seismic acquisition and the drilling of the well, was anticipated to cost about $50 million. Genel will also be required to pay a pro-rata share of back costs of about $700,000.
Jacka chairman Scott Spencer said he considered Genel’s decision to farm into the block as a significant endorsement of the petroleum potential of the region.
“Genel is building a very exciting portfolio of producing and exploration assets in the Middle East and North Africa and has the resources and expertise to accelerate exploration in Somaliland for the benefit of all stakeholders,” he said in a statement.
Spencer added that the farm-out fitted well with Jacka’s planned schedule of activities over the next 12 months: “With appraisal / pre-production drilling in Tunisia and Nigeria, the company has the prospect of moving to a new level, with bookable reserves and near-term revenue to support its more frontier exploration efforts”.
The Odewayne Block encloses a Jurassic/Cretaceous rift basin in the south-west of Somaliland, covering about 22,000 square kilometres. It lies directly to the west of SL10B/SL13 - another block that Genel has recently farmed into.
The company said last month it was injecting $400 million into an upcoming exploration campaign on its newly-acquired African acreage, which also includes Morocco, Ivory Coast and Malta.
Jacka said airborne gravity and magnetic surveying by Fugro has already started on the Odewayne Block.
The farm-in agreement remains subject to government approval.
