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Simba Signs Farmout Letter of Intent for Guinea Blocks 1 & 2
Simba Signs Farmout Letter of Intent for Guinea Blocks 1 & 2.
About this update from Simba Essel Energy Inc
[{"type":"text","content":"\n \n \n Simba Signs Farmout Letter of Intent for Guinea Blocks 1 & 2\n \n \nSimba Signs Farmout Letter of Intent for Guinea Blocks 1 & 2\n \n 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. \n 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). \n The principal commercial terms of the farmout LOI are highlighted as follows:\n \n \n After execution of the LOI, Simba will receive US$700,000 for cost recovery.\n 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. \n 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.\n 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.\n \n \n 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 ...