Current areas of operations by Genel Energy plc – an Anglo-Turkish exploration and production company
Genel Energy is to acquire a 40% stake in Ethiopia’s Adigala block from a private company called New Age.
The exact terms of the deal weren’t disclosed. However, Genel will pay a contribution to back-costs and towards a planned 2D seismic programme.
An earlier reprocessed 2D survey over 520 kilometres provided evidence of a working petroleum system, as did other tell-tale signs such as oil seeps and surface outcrops of type of rock that might contain oil.
The area is said to bear all the hallmarks of the prolific producing Jurassic Rift Basins of Yemen.
Several large potential structural closures (oil traps) have been identified on existing data.
The Adigala Block covers around 27,000 square kilometres and borders Djibouti to the north and Somaliland to the east.
The deal is expected to complete next month and requires sign-off from the Ethiopian authorities.
“The move sits comfortably within the group strategy of expanding the high impact exploration portfolio in the Middle East and Africa especially where Genel can acquire a material position,” said Oriel Securities.
It rates the stock a ‘buy’ and its ‘risked’ net asset value is £13.23. This is around a third higher than the current price of just over £10 a share.
Kurdistan-focused Genel’s African exploration portfolio including its interests in the Ivory Coast, Somaliland and in Morocco, where drilling is planned later this quarter.
Essentially echoing Oriel’s point, Northland Capital Partners said of Monday’s news: “The move marks the expansion of Genel’s Africa interests and highlights the continuing attraction of East Africa as a hydrocarbon exploration following the significant successes offshore Tanzania and Mozambique and onshore Kenya.”
