Africa Oil has signed agreements to acquire a 25.2% equity interest in UK-based Impact Oil and Gas, which has exploration assets in South and West Africa.

Under the agreements, Africa Oil will purchase 59,681,539 ordinary shares and 29,840,769 ordinary share purchase warrants belonging to Impact for an aggregate subscription price of around $15m.

Another agreement signed by Africa Oil will allow it to acquire 70,118,381 shares and 15,529,731 warrants currently held by Helios Natural Resources 2 in the capital of Impact.

In exchange, the company will offer 13,946,545 common shares to Helios.

Africa Oil CEO Keith Hill said: “We are very pleased to acquire a significant interest in Impact, which holds a highly attractive portfolio in West and South Africa that has the potential for major discoveries in the short and medium term.

“The structure of these investments allows us to preserve the necessary cash to ensure we can get to first oil without issuing additional equity.”

“This investment is a strong complement to our existing holdings in Africa Energy and ECO Atlantic and results in Africa Oil having exposure to some of the most exciting exploration plays in Africa to complement our Kenya development project.

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“The structure of these investments allows us to preserve the necessary cash to ensure we can get to first oil without issuing additional equity.”

The closure of the transactions is conditional upon certain customary closing conditions, including approval of the Toronto Stock Exchange and shareholder approval of Impact.

Through the acquisition of a stake in Impact, Africa Oil will have exposure to fields held by Impact in South Africa, Senegal and Guinea Bissau, Namibia, and Gabon.

Impact’s portfolio covers a combined area of more than 90,000km².