Canada-based Africa Energy Corp. entered into a farm-out agreement with a Pancontinental Oil & Gas NL subsidiary, acquiring a 10% participating interest in Petroleum Exploration License 37 (PEL 37) offshore Namibia.

Africa Energy’s participating interest share of all joint venture (JV) costs, including the drilling of the first exploration well on PEL 37, will be fully carried through the current exploration period by a JV partner.

Africa Energy will pay Pancontinental US$1.7 million at the closing, and an additional US$4.8 million when the first exploration well is spudded, the company said Nov. 29.

The farm-out’s completion is subject to receipt of all requisite government approvals, other regulatory approvals, third-party consents, partner approvals, and finalization of due diligence procedures.

James Phillips, president and CEO of Africa Energy, said that PEL 37 contains a series of extensive base-of-slope fan prospects with significant combined resource potential. The fans directly overlie a mature oil-prone source rock of Aptian age, he said.