Universal joins gas hunt in earnest

UNIVERSAL Power Corporation intends forking out US$4,5 million (N$36 million at the official exchange rate yesterday), to find out how rich Blocks 2713A and 2815 in the Orange Basin, next to the Kudu Gas Field, are in gas and oil.

The Canadian-based company has signed an agreement with HRT Petroleum of Brazil to collect and analyse all existing and historical data and compile an ‘economic data package’, for which they are willing to pay nearly US$2,7 million plus taxes in cash.
Furthermore, HRT will provide a data room in Rio de Janeiro, where the data package can be reviewed with potential farm-in partners. This will cost Universal US$1,5 million in shares, payable on the conclusion of a successful farm-in agreement.
The bill is the latest in a number of cheques Universal has been signing the last 18 months to gain control over 2713A and 2815.
Laughing all the way to the bank in the process was local businessman Knowlegde Katti, a director of Universal who enjoyed the majority interest in these blocks.
Last week, Universal signed a Letter of Intent (LoI) with Limpet Investments, controlled by Katti, to obtain the 60 per cent shareholding of the Namibia Industrial Development Group (NIDG) in 2815.
NIDG is a subsidiary of the South African Industrial Development Group (IDG), the first all-African black empowerment company to have signed an exploration agreement with Government in 2006, obtaining the 2815 interest. Besides being an IDG director, Katti formed part of this deal through Cumoxi Investments and Knowledge Resources, who shared in the 2815 ownership.
Universal offered Limpet US$1 million, of which US$500 000 has been paid as a refundable deposit, as well as three million common shares in Universal. On completion and subject to approval, Universal will also pay Limpet a finder’s fee of 300 000 common shares in the capital of the company.
Katti also controls Cumoxi Investments. In June last year, he sold Cumoxi’s 30 per cent interest in NIDG, and their interest in 2815, among others, to Universal for US$1,5 million.
The Limpet and Cumoxi deals ensured Universal a 90 per cent shareholding in Block 2815.
Katti founded Kunene Energy, and obtained 100 per cent shareholding in Block 2713 A. The Cabanas Business Group, owners of 20 per cent of Kunene, sold 90 per cent of the interest in 2713 A to Universal for US$850 000 and 1,5 million common shares.
Universal therefore enjoys the majority shareholding in both blocks.
Surveyors HRT share Universal’s enthusiasm for 2815 and 2713 A.
‘The special location of both blocks closely associated with the Kudu field and directly related to two very important oil and gas hydrocarbon kitchens, located in the south and western portions of the basin, gives the area a very special geological situation regarding the charge of oil and gas over the structures already envisaged,’ HRT President Marcio Rocha Mello says in a statement on Universal’s website.
‘I am very confident about the oil and gas potential on these blocks,’ he says.
In April, Universal signed a memorandum of understanding (MoU) with the National Petroleum Corporation of Namibia (Namcor).
The agreement allows Universal to combine its operational expertise and access to international capital with the support and resources of Namcor. Exploration, development and opportunities, debt and equity finance, asset swaps and data set exchanges all form part of the agreement.
jo-mare@namibian.com.na