Simba Energy Inc. (TSXV:
SMB) Monday reported that it has executed an agreement with Essel Group
Middle East, of Dubai, UAE, a subsidiary of Essel Group India, wherein Essel
Group will earn a 60% participating interest in Simba’s existing Production
Sharing Contracts in Kenya, Chad and Guinea. Thus, Essel will pay all of Simba’s
future exploration costs.
Simba
Energy stock moved up 50% to $0.045 on more than 4.5 million shares traded following
the announcement.
This is a
potential company-transformational deal for Simba as India’s Essel Group is a
strong, credible partner. Essel for over three decades has been a leading
business conglomerate having diverse business presence across media,
entertainment, packaging, infrastructure, education, precious metals and
technology sectors. Essel Group has annual revenue in excess of $4 billion.
Some of Essel’s
biggest brands include Dish TV, Asia’s largest Direct to Home Entertainment Company,
and Zee Media Corporation, India’s largest news network with 10 channels and
130 million viewers.
Kenya, for
example, has seen the discovery of oil for the first time in East Africa as Africa Oil (TSXV:
AOI), in a JV with Tullow Oil, continues its success with the oil discovery
at its Kenyan block 10BB. Investors are looking for other plays that can
emulate such success and Simba is clearly well positioned with a big land
package and its geologically attractive positioning.
Disclosure: Simba Energy is a client company
of SmallCapPower/Ubika Research and has paid a fee for coverage.
