East Africa is rapidly emerging as one of the most prospective new oil frontiers and a horde of listed exploration and production (E&P) companies are moving quickly to exploit enticing opportunities there.
Last week the London Stock Exchange welcomed Caracal Energy (CRCL) to its ranks. The Chad-focused oil group had hoped to raise $150m (£99m) in an equity offering in May, but eventually abandoned the placing, citing poor demand among investors. The company, based in Calgary, Canada, nevertheless soldiered on with the listing and says it remains adequately funded to carry out its plan to increase production to 36,000 barrels of oil a day from Chad by the end of 2014. Caracal announced on 16 July that it is on track to start producing oil from the Badila field later this month.
But while Caracal is new to the markets, it already has a chequered past as a privately held entity. The company changed its name from Griffiths Energy International earlier this year after pleading guilty in a Calgary courtroom to bribing foreign officials in Chad between 2009 and 2011 to help obtain oil licences there. The company agreed to pay a record C$10.3m (£6.5m) fine in a negotiated settlement in January 2013.
Griffiths was co-founded years earlier by Brad Griffiths, a prominent Canadian investment banker who died in a boating accident in mid-2011. According to Canadian newspaper The National Post, a new management team then took charge of his energy company and "were made aware" of the company's alleged bribe over the following months. Legal documents disclosed during the proceedings reveal Griffiths Energy had hired a notorious international lobbyist to intervene with the president of Chad and had also directed $2m to bank accounts connected to the wife of Chad's ambassador to the United States and Canada.
This month has also seen much more positive news come out of east Africa. Tullow Oil (TLW), a world leader in frontier oil exploration, announced that its Etuko-1 exploration well in Kenya had found 40 metres of net oil pay across two reservoir zones. The well comes hard on the heels of two other successful frontier wells drilled by Tullow in Kenya's South Lockichar basin (Nagamia-1 and Twiga South-1).
Meanwhile, in neighbouring Ethiopia, Tullow's frontier Sabisa-1 well enjoyed more muted success. The well suffered from hole instability but had encountered oil, heavy gas and reservoir-quality sands before being plugged and abandoned.
Lastly, Bowleven (BLVN), the Africa-focused oil and gas exploration group, received a welcome financial boost from First Oil, a privately owned UK E&P company, which has agreed to spend up to $21.5m on Bowleven's east African exploration prospects in return for a 30 per cent interest in a subsidiary company.
