Canadian firm Simba Energy hopes to raise up to Sh210 million for exploration of its northern Kenya block from the just-concluded private share placement.
The firm closed the offer last week and says it will use the funds for work on Block 2A.
“The company plans to use the proceeds of the private placement to fund exploration commitments associated with the company’s production sharing contracts in Kenya, and general working capital purposes,” said Simba chief executive Robert Dinning in a statement.
Simba recently raised additional funds by selling a 60 per cent interest in the block to Essel Group Middle East in December last year.
Essel Group said at the time that the deal would allow it expand into Africa’s exploration market.
“We hope our direct participation in the board of directors will enhance shareholder interests regarding project development planned on both current and future assets in Africa. Our commitment of investing $100 million will be focused on this effort,” said Essel Group.
The farm-out agreement will enable the drilling of two wells.
Simba Energy one of a handful of explorer still sticking to exploration plans hoping oil prices will rise.
Pancontinental Oil of Australia, Afren of the UK and America explorer Marathon Oil have all exited the Kenyan market due to the low price of oil on the international market that has made local production commercially unviable.
Tullow and Africa oil are other firms still carrying out exploration.