Business
Tanzania oil firm to raise capital from local investors
Oil and gas explorers usually look outside East Africa’s relatively smaller financial markets to more developed markets like the United States, Canada and Europe, for funding to fuel exploration.
But Tanzania-based hydrocarbon explorer Swala Oil and Gas is going against the tide.
The company has launched a private placement in Tanzania, hoping to raise US$1.2 million. The company will use the money to collect data on the best drilling locations along its acquired blocks.
The private placement opened in August and closes at the end of September, with investors expected to buy a minimum of 80,000 shares at Tsh390 (US$0.25) per share. Tanzania Securities is the issue’s stockbrokerage agent.
“Though oil and gas is a relatively new sector in the region, we feel the market is ripe for this kind of investment, we shall use the funds to collect more data as well as interpret what we have,” said David Ridge, the company’s CEO, in an interview with reporters on the sidelines of the just ended Africa Down Under mining conference in Perth, Australia.
(More: Africa: Private Equity – New Cash for Expanding Businesses)
Mr Ridge said the firm has considered doing a private placement for Swala Oil and Gas Ltd Kenya, but its limited assets in the country make it a hard sell.
“We have only one block in Kenya compared with two in Tanzania. Considering the risk involved in oil and gas exploration, it was more prudent on our part to offer the public a stake in our Tanzanian operations,” said Mr Ridge.
