Strata-X Energy Ltd. has entered into a heads of agreement with Magnum Gas and Power Ltd for a staged farm-in to earn up to 75% of the Serowe CSG gas project located on the Kalahari Basin CSG Fairway in Botswana, Oil Voice informed. Strata-X will operate the project, which spans approximately 273,000 acres.
The proposed farm-in is in three stages and the company has up to 3 years to complete all stages, with each stage earning the company a 25% working interest in the Serowe CSG Project. The first stage will begin in January of 2017 and will involve the desorption analysis of 3 CSG core wells as required for continued gas resource certification, the company wrote on its website. In addition, one well will be completed and production tested.
According to Reuters, Strata-X had earlier halted trading pending the announcement about a project farm-in and an equity raising.
There is a growing demand for power in the country and in neighboring countries which offers immediate and expanding domestic gas markets.
These factors, combined with a 3 % government royalty on produced gas, make Botswana one of the more favorable economic settings in the world.