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LONDON (Alliance News) - Primorus Investments PLC on Monday said its investee, SOA Energy, has now signed a farm-in agreement with Israeli oil & gas firm Delek Drilling.
Primorus owns 14,977 shares in SOA, which it purchased for GBP100,000 in 2017.
The AIM-listed investment firm said Delek will invest up to USD8.3 million, comprising USD1.8 million to reimburse SOA for licence back-costs and bank guarantees, and up to USD6.5 million to cover the expected cost of an appraisal well and production test.
In return, Delek will assume a 25%, non-operated stake in each of the Ofek and Yahel licences, located near Lod city in Israel, leaving SOA with a 45% stake in each permit.
This finance will allow SOA to push forward with the drilling of the Ofek appraisal well and the SOA operational team is working alongside Delek to prepare for drilling.
Primorus said SOA and Delek are expecting to be in a position to spud the well this summer. The well is expected to take circa 40 days to drill, with another 40 days of testing to follow.
"We are delighted that SOA have now completed the farm-in agreement with Delek and can now move their long-awaited plans for re-entering the Ofek discovery with an appraisal well as soon as this summer," said Primorus Executive Director Alastair Clayton.
"As an early investor in SOA we are now well placed to benefit from the Farm-in and any uplift in the value of our investment resulting from delineating commercial hydrocarbon reserves and resources," Clayton added.
Primorus shares were trading flat on Monday at 0.11 pence each.