Jacka Resources Farms Out Stake in Somaliland Oil Block To Sterling Energy.

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Jacka Resources (ASX: JKA) has farmed out a 15% stake in the Odewayne Block Production Sharing Contract onshore Somaliland to partner Sterling Energy (LON: SEY) for US$15 million.

Notably, both companies will be carried by operator Genel Energy Somaliland (LON: GENL) for the cost of all exploration activities during the Third and Fourth Periods of the PSC, which currently ends in May 2016.
This includes a full-block airborne gravity and magnetics survey that has been completed, at least 1,500 kilometres of 2D seismic and an exploration well for a total cost of US$50 million.

Jacka will retain a 15% interest in the block while Sterling will increases its stake up to 25%.

Jacka will be paid US$3 million upon signing the agreement and a further US$12 million upon three operational milestones being met.

These milestones are linked to the minimum work program in the Third and Fourth Periods of the PSC.

Jacka’s regional studies had highlighted that the Odewayne Block could contain a sedimentary basin analogous to the multi-billion barrel producing oil basins in Yemen.

Genel Energy has a 50% interest in Odewayne while Petrosoma holds the remaining 10%.