Raytec Metals switches focus to oil and gas exploration and production
Raytec Metals Corp. (TSX-V: RAY) is in need of a name change. Originally focused on potash exploration and more recently stating that it was eyeing up precious metals projects, the junior mining company stunned investors yesterday afternoon when it announced that it had signed a letter of intent with Africa Oil Corp (TSX-V: AOI) for entry into the production sharing contracts in the State of Puntland, Somalia and Kenya. Africa Oil is a member of the Lundin Group.
In Puntland, Somalia, Africa Oil will transfer a 25% license interest to Raytec Metals in the Nogal and Dharoor Petroleum Production Sharing Agreements. The Nogal and Dharoor blocks include two hydrocarbon basins and cover an area of 81,000 square kilometres. The Nogal and Dharoor basins are believed to host a petroleum system geologically similar to those in the Republic of Yemen.
The remaining 50% interest in the Nogal and Dharoor blocks are held by ASX listed Range Resources, which has been the subject of intense media and shareholder speculation ever since it originally announced that it had been awarded the rights to explore for all mineral and hydrocarbon prospects onshore and offshore Puntland. Puntland is located on the north-eastern tip of Somalia. Africa Oil and Range Resources have been hampered in their attempts to drill in Puntland due to the unpredictable security situation and pirate activity off the coast of Somalia.
In Kenya, Africa Oil will transfer a 10% interest in the Block 9
Production Sharing Agreement and a 25% license interest in its other
interests in Kenya, which include over 10 million acres in the Anza
Brian Thurston, President of Raytec, commented, "I am pleased to announce this strategic transaction and welcome the opportunity to partner with one of the most respected names in the resource industry.
The Lundin Group has been directly involved in the discovery and development of several major oil fields which has resulted in the creation of enormous value for their shareholders. The Lundin Group of Companies currently operates in over thirty different countries worldwide in the oil and gas sector as well as the mining sector. The Group has been highly commended by local communities and governments over the years for their efforts in developing a set of protocols that ensure issues of environmental and cultural concern are addressed as well as economic benefits and employment opportunities."
Raytec further announced that it would raise up to C$3 million in a private placement of 10 million units at 30 cents per unit. Each unit will consist of one share and one two year warrant with 50 cent exercise price
Australia's Range oil shrugs off Somali pirates
Reuters, Wednesday May 20 2009 * Executive director to visit Puntland for talks
* Says Canadian partner to start drilling by Q4 '09
By Alison Bevege
NAIROBI, May 20 (Reuters) - Australian explorer Range Resources said piracy will not deter it from exploring for hydrocarbons off chaotic northern Somalia.
The independent company won a deal in 2005 giving it concession rights to all minerals and petroleum in the country's semi-autonomous Puntland region, an area that geologists say has a high chance of containing commercial oil reservoirs.
Puntland has been relatively unscathed by a two-year Islamist insurgency that has rocked Somalia's south and central regions. But it is a base for many of the pirates who have been attacking vessels in the busy shipping lanes offshore.
"Other than potential implications on insurance costs, we don't think piracy has a huge impact. A number of vessels have been attacked offshore but they haven't had escorts," Range's executive director Peter Landau told Reuters late on Tuesday.
He said that he would be visiting Puntland in the next few weeks to meet its leadership and discuss oil and gas projects.
"If you're going to do offshore seismic then you would only do it with the support of the Puntland government and the seismic vessel will have an armed escort, preferably a government vessel," Landau said by telephone from Dubai.
Onshore, he added, Range's joint venture partner Africa Oil Corp is also in talks with the Puntland authorities and hopes to begin drilling in the fourth quarter of this year.
The Canadian company had started seismic mapping in a region it believes has good prospects of holding large oil deposits. Geologically-similar formations in Yemen, across the Gulf of Aden, hold nearly 4 billion barrels.
Africa Oil Corp has agreed to invest $50 million in exploration in return for an 80 percent stake in the area's Nogal and Dharoor blocks. Range holds the remaining 20 percent.
Landau said the Canadian firm had spent $22.5 million working in Dharoor. Nogal is still to be explored. Africa Oil raised $35 million through a private shares placement in April.
In January, some former staff members in Puntland criticised the Canadian company for failing to pay their salaries, but Landau said the claims were false and had come from aggrieved sub-contractors.
Africa Oil could not immediately be reached for comment.