Africa Oil Corp (TSX:AOI) has struck an option agreement to potentially increase its stake in Impact Oil and Gas Limited to 39.5%, enhancing its influence over key assets in Namibia's Orange Basin.
The company announced the signing of a call and put option agreement with three shareholders of Impact Oil and Gas, which could see the Canadian company acquire an additional 7% interest in Impact.
The option agreement grants Africa Oil the right to purchase nearly 80.2 million additional shares in Impact at GBP 0.57 per share over a six-month period.
The company has secured the call option for a price of GBP 0.08 per underlying Impact share.
Africa Oil’s CEO Roger Tucker highlighted the strategic importance of the agreement, noting that through its increased shareholding in Impact, the company would further its involvement in the promising exploration and appraisal activities in Namibia's Orange Basin.
“This purchase achieves the company's objective of materially increasing its ownership in Impact, enhancing its rights and influence over a core strategic asset and value driver for Africa Oil,” Tucker said in a statement.
If the option is fully exercised, Africa Oil will hold 449.46 million shares in Impact.
Africa Oil is known for its producing and development assets in deepwater Nigeria and a growing exploration portfolio across West and South Africa.
This strategic move is expected to bolster its position in the region, particularly with regard to the Venus oil discovery and other prospective ventures in the Orange Basin.