Strata-X Energy Ltd (ASX:SXA) has gained full control of the Serowe Coal Seam Gas Project in Botswana.
The company secured 100% ownership by pre-empting a third party offer to buy out a 25% interest held by Magnum Gas and Power Ltd (ASX:MPE).
Acquiring the remaining stake has cancelled a farm-in agreement that Strata-X had over the 273,000 acre, 1.4Tcf prospective resource.
Magnum Gas and Power has changed its name to Raven Energy Ltd and is now trading under its new ticker ASX:REL.
Greater development flexibility
It provides the company with greater flexibility in developing the resource and greater optionality to use the value in the tenement in lieu of shareholder dilution.
Strata-X will pay a deposit of $25,000 to Magnum Power and Gas and expects to execute a formal purchase and sale agreement by the end of February 2018.
Further staged payments amounting to $525,000 will then be made and a 3.5% royalty interest granted over the 25% interest.
Project in CSG region
The project is in the Kalahari Basin CSG Fairway and offsets tenements held by ASX peer Tlou Energy (ASX:TOU).
Strata-X holds the Serowe tenements through its Republic of Botswana subsidiary, Rhino CBM.
Planning 2018 program
The company will now begin environmental surveys and complete an Environmental Management Plan for its 2018-2019 work program.
After concluding the plan, it will move forward with a drilling and testing program.
Strata-X plans to use ultra-low cost innovative technologies and methods to develop and convert the gas resource to reserves.
