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Friday, June 30, 2023
PetroNor E&P reports that it has entered into a binding agreement to farm-out 100 percent of its participating interest in its two exploration licenses offshore Guinea-Bissau to a special purpose vehicle owned by Apus Energy DMCC, a subsidiary of Petromal.
The agreement has an effective date of January 1, 2023 and PetroNor will receive a payment of up to $85 million divided into a contribution towards past license costs of at least $25 million at completion of the transaction. The agreement also includes a further entitlement to two contingent earnout payments of $30 million each, subject to government approval of a field development plan and achievement of continuous production respectively.
“Today’s agreement marks an important milestone for PetroNor and for Guinea-Bissau as completion of the transaction will add significantly to PetroNor’s balance sheet and lead to the drilling of an exploration well during the first half of 2024,” commented interim CEO Jens Pace.
The agreement involves the Sinapa (Block 2) and Esperança (Blocks 4A and 5A) licenses. The assets will be assigned to Apus Energia Guiné Bissau SA, which is owned by Apus Energy DMCC, a Dubai-based joint venture majority owned by Petromal LLC.
Petromal LLC is the largest PetroNor shareholder, with an ownership of close to 34 per cent of the shares. Since the transaction involves a related party, the non-conflicted directors on the board have received an independent assessment from KWC AS of the fairness of the negotiated terms, which concludes that the transaction is fair.
‘We are happy to have worked with our largest shareholder to conclude this transaction that will create value for all shareholders by strengthening our balance sheet to put us one step closer on our pathway to paying dividends’ added Pace.
PetroNor E&P AB, which holds the Sinapa and Esperança licenses was purchased from Svenska Petroleum Exploration AB in 2021, when PetroNor assumed operatorship and an interest of 78.57 per cent in both licenses. In 2023, it was confirmed that the remaining 21.43 per cent previously held by FAR Limited had been transferred to PetroNor.
The combined licenses cover an area of 4,963 sq kms. According to PetroNor estimates, the two main prospects, Atum and Anchova, represent mean un-risked prospective resources of 467 MMbbl.
The signature of the agreement was witnessed by a representative of Petroguin, the national oil company of Guinea-Bissau. The transaction is expected to be completed in the second half of 2023 pending final government approval of a license extension, the assignment of interests and operatorship, and satisfaction of certain other closing conditions customary for a transaction of this kind.
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