Africa Oil Corp has entered into an investment agreement with Stampede Natural Resources to sell, on a non-brokered private placement basis, 52,623,377 of its common shares at a price of US$1.9 for gross proceeds of US$100mn
Upon completing, Stampede Natural Resources will own 12.37 per cent of the issued and outstanding common shares of Africa Oil Corp.
Stampede Natural Resources is owned by a fund advised by Helios Investment Partners, which is an Africa-focused investment firm.
Babatunde Soyoye, founding partner at Helios Investment Partners noted, “This deal is a perfect example of Helios’ differentiated strategy. It is our fourth oil and gas platform company making us the most active private equity group in African oil and gas sector. It combines both our oil and gas industry expertise, and our deep African knowledge. Kenya is one of the fastest growing economies in Africa and Helios is one of the largest foreign investors in the country.”
Africa Oil Corp has also granted certain rights to Stampede Natural resources including the right to participate for its pro-rata share in future financings. The net proceeds of the private placement will be used towards Africa Oil’s ongoing appraisal and development work programme in East Africa.
Africa Oil Corp CEO Keith Hill said, “We are very pleased to have been able to attract a large investor with the credentials and reputation of Helios into the company, which we consider as a strong endorsement of the Lokichar Basin project, despite the current oil price downturn. This relationship will not only be of short-term benefit by strengthening our balance sheet and allowing us to continue with drilling operations and pre-development work, but also has the potential to provide a core investor as the development project progresses.”
Helios Investment Partners’ Andy Bartlett added that they are delighted to invest in Africa Oil.
“This is a flagship transaction for the firm to help develop Kenya's nascent petroleum sector. The capital is being deployed to further this project, which we consider to be world class in terms of potential. It has all the right characteristics for the sector in a lower oil price environment,” he noted.
