Exploration and Production company Panoro Energy is exiting Nigeria following an agreement to sell all of its interest in OML 113, offshore Nigeria, to PetroNor.
On the other hand, PetroNor will take over a lead technical and management role for the project to progress it to the next phases.
Panoro said on Tuesday it had entered into a sale and purchase agreement with PetroNor E&P Limited (PetroNor) to divest all outstanding shares in its fully owned subsidiaries Pan-Petroleum Services Holding BV and Pan-Petroleum Nigeria Holding BV for an upfront consideration consisting of the allotment and issue of new PetroNor shares with a fixed value of $10 million plus a contingent consideration of up to $25 million based on future gas production volumes.
The divested subsidiaries hold 100 per cent of the shares in Pan-Petroleum Aje Limited (Pan Aje), which participates in the exploration for and production of hydrocarbons in Nigeria and holds a 6.502 per cent participating interest, with 16.255 per cent cost bearing interest, representing an economic interest of 12.1913 per cent in Offshore Mining Lease no. 113 (OML 113).
Following completion of the transaction, Panoro will have no presence in Nigeria.
John Hamilton, Chief Executive Officer of Panoro said: “Aje was a non-core asset for Panoro and allows us to further focus on expanding our organic operations in Tunisia and Gabon while retaining exposure to the considerable upside at OML 113 through the deferred consideration. We are very confident that PetroNor has the technical and financial capabilities along with the depth of expertise and vision to advance further the next ambitious development phases of Aje in a smooth and efficient aligned partnership with the operator, YFP.”
Under the terms of the transaction, PetroNor has an option to pay a portion of the share consideration in cash, in an event PetroNor’s share price reduces to less than $0.13 per share (based on the current number of shares in issue), at the time of completion of the transaction.
By its indirect acquisition of Pan Aje, PetroNor will with effect as of June 30, 2019, assume all the benefits and obligations in relation to Panoro’s interest in the OML 113 operations.
The Aje field was discovered in 1997 in water depths ranging from 100-1,500m. The field came on production in May 2016 with oil processed and exported from a leased FPSO, the Front Puffin.
It has produced a cumulative of 3.6 million barrels of oil and condensate as at August 1, 2019. The current production rate is in the order of 3,000 bopd of oil (including some condensate). PetroNor has been working with the indigenous company, YFP, to prepare a re-vitalisation plan for the field.
The development program is phased to minimize exposure and secure a solid rate of return on the investment. The field is expected to reach a gross production of 20,000 boepd of which 5,000-7,000 bopd consist of oil and condensate.
