Pancontinental Oil & Gas will purchase a ten percent stake in licence EL 0037, located offshore of Namibia, from Paragon Holdings.

The company will now pay Paragon $2m for the licence and a further $2m when Pancontinental farms out any interest in EL 0037, or six months after the effective date of the transaction.

"The company plans to drill at least six wells in the area during the next 12 to 18 months."

Its interest in the licence, which covers 17,295 square kilometres in the Walvis Basin, will now increase to 95% while Paragon Holdings’ interest will reduce to five percent.

The company plans to drill at least six wells in the area during the next 12 to 18 months.

EL 0037 covers an extensive part of an Inner Graben, a geological trough, where the company has identified and mapped a number of ponded turbidite, slope turbidite, basin floor turbidite fans and channels.

Pancontinental may undertake detailed mapping to define the full extent of the structural and strati-graphic closures and potential oil-bearing traps.