Swala Oil & Gas (Tanzania) has signed up Exotix Partners to place US$120 million of corporate bonds, the company said on October 12. Swala was the first oil and gas company to be listed on the Dar es Salaam stock exchange and has “significant local ownership”, it said.
Placing bonds follows Swala’s acquisition of Block D in Burundi, as part of its plan to move into other African areas. The company listed in Tanzania in August 2014.
“We took the decision earlier this year to balance our asset portfolio and to expand our area of operations, and we are in reasonably advanced discussions aimed at achieving those objectives. Engaging Exotix, with its unmatched experience in raising funds for African projects, is a step towards completing that transaction,” said Swala’s CEO, David Mestres Ridge. “As an active supporter of the development of the Tanzanian capital markets, Swala will also invite interested Tanzanian institutions, along with other investors, to participate in this Exotix placement.”
The company announced its Burundi move at the end of September, signing on to buy the asset from Surestream Petroleum. The block is in the south of Lake Tanganyika, close to Tanzania. It is principally offshore although there is some onshore coverage. The company cited a potential comparison with Uganda’s Lake Albert.
Swala struck the deal with Surestream through the offer of 6.25 million shares, equivalent to a post-completion stake of 6.25% in the company.
“The Burundi licence is a very prospective licence and its development will be helped by the nearby route of the proposed Uganda-Tanzania oil pipeline. We look forward to deepening our relationship with Surestream, who today become one of our principal investors,” Mestres Ridge said at the time. Earlier this month, on October 3, Swala said it would not drill the Kito exploration well, on the Kilosa-Kilombero licence. The company said it had missed the weather window to drill it this year, partly because of the need to secure required permits. As such, it said it would seek an extension on the licence in order to postpone the well for drilling in 2017.