Swala acquires new block, seeks $120m

Dar es Salaam. Swala Oil and Gas Tanzania is seeking to raise $120 million (over Sh250 billion) to finance material transaction after recently acquiring an exploration block in Burundi.

The Dar es Salaam Stock Exchange-listed company announced last month that it acquired Surestream Petroleum (Burundi) Limited which had a 100 per cent working interest that covers portions of the northern end of Lake Tanganyika, in Burundi.

The licence encompasses the offshore part of the lake, with minor acreage onshore.

The company now says it has engaged investment firm Exotix Partners LLP to place corporate bonds of up to a value of $120 million in order to finance a material transaction.

“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,” said Swala chief executive officer David Ridge in a statement released Wednesday.

“Engaging Exotix, with its unmatched experience in raising funds for African projects, is a step towards completing that transaction. 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,” he added. Development of Burundi licence is expected to be helped by the nearby route of the proposed Uganda-Tanzania oil pipeline.

Swala is the first oil and gas company listed on an East African Stock Exchange with a significant local ownership. The company holds assets in the East African Rift System with a total net land package in excess of 8,500 square kilometres.