SWALA Oil and Gas (Tanzania) Plc has reached an agreement with Tata Petrodyne Limited (TPL), under which TPL shall farm into the Pangani and Kilosa-Kilombero licences in Tanzania. The agreement allows Swala to remain committed to these licences and to secure funding for future exploration activities in a way that minimizes the risk to its current shareholders. The terms of the agreement with TPL will include on receipt of governmental approvals for the transfer of interest TPL will pay Swala the sum of USD 5.7 million for a 25% equity interest in the Kilosa-Kilombero license and a 25% equity interest in the Pangani license as consideration towards the past costs incurred on the licences.

Others are TPL will free carry Swala through the costs of the initial well on the Kilosa-Kilombero license, up to a maximum of USD 2.5 million (Swala estimates the gross cost of the well to be USD 10.0 million), TPL will free carry Swala through the costs of the initial well on the Pangani license, up to a maximum of USD 2.125 million (Swala estimates the gross cost of the well to be USD 8.5 million). Another is TPL will pay Swala up to a further USD 1.0 million towards the cost of a second well following a commercial discovery in the initial well on the Kilosa-Kilombero license. Costs incurred above this sum shall be shared by the partners in proportion to their equity.