Swala Oil and Gas Tanzania (SOGTL)

Independent oil and gas exploration company active in Africa

INDUSTRY

Oil and gas

LOCATION

East Africa

STATUS

Active

Significant shareholder in Songo Songo

Swala is in the process of acquiring a 40% interest in Orca Exploration Group’s natural gas exploration, development and supply business in Tanzania including the Songo Songo field (the first gas to power project in Sub-Saharan Africa). The field has been producing gas for the past 13 years and has generated significant value for all the stakeholders and is a premium hydrocarbon asset in Tanzania. The acquisition is expected to provide a strong cash flow for the company from year 1.

Early entrant on the Tanzanian side of EARS

Swala secured prime exploration licenses in Tanzania years before the East Africa Rift System (EARS) became an oil exploration hotspot. Currently, it has a total land package of more than 14,000 sq. km. in the system where new discoveries have been reported on several licenses recently including the multi-billion-barrel Albert Graben play. In 2015, independent assessment confirmed a prospect on one of the company’s active license with a potential of up to 185 million barrels of oil (contingent resources). Drilling is expected to commence in early 2019.

Strong management and reputed technical partners

Swala’s management team has a proven track record of value realisation in East African oil and gas. The senior members were earlier part of Black Marlin Energy which was able to develop a significant acreage in East Africa before its acquisition by Afren (LSE:AFR) just two months after listing in 2010. Further, the company has high quality operating partners in Orca Exploration Group (also a significant investor) and Tata Petrodyne Limited (part of Tata Group).

First listed oil and gas company in Tanzania

Swala Oil and Gas (Tanzania) plc was one of the first hydrocarbon companies to list in the local Dar-es-Salaam stock exchange (in 2014). Swala has been proactive in supporting Tanzania’s social and economic development goals by funding a trust (worth 7.5 million shares) for the benefit of the communities in the areas in which the company operates. Based on the current share price, this trust has a value of $1.65 million (TZS 3.75 billion). The company is also planning to cross list the stock in AIM London to develop a broader international investor base and facilitate true price discovery.

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