(Alliance News) - Shares in Anglo African Oil & Gas PLC fell by a third on Friday after it said it will now sell its stake in its Congo subsidiary at a cut price of GBP200,000.
Back in December, Anglo African penned an agreement with Zenith Energy Ltd to sell its 80% interest in Anglo African Oil & Gas Congo SAU for GBP1 million. Then in March, the price was lowered to GBP800,000.
Anglo African was trading 33% lower at 0.17 pence each in London on Friday afternoon. Zenith was 17% higher at 0.88p.
Anglo African Oil & Gas Congo SAU holds a 56% interest in the Tilapia oil field in the Republic of the Congo. The remaining 44% interest is held by Societe Nationale des Petroles du Congo, the Congolese national oil company.
Zenith Chief Executive Officer Andrea Cattaneo said: "Acquiring a 56% interest in the potentially transformational Tilapia oilfield, as well as 100% of the approximately USD5.3 million in receivables, for a consideration of GBP200,000 is a fantastic result made possible by the exceptional circumstances brought about by the Covid-19 pandemic, as well as the current low oil price environment.
"We are fully confident that the necessary regulatory approval process in the Republic of the Congo for the transfer of ownership, as well as negotiations for a 25-year renewal of the Tilapia licence, will conclude positively, having been delayed due to the difficulties caused by Covid-19."
Anglo African will become a cash shell once the deal gets over the line. The company back in December said it intends to use the proceeds from the disposal to finance its day-to-day operations and consider potential reverse takeover options.
By Eric Cunha; ericcunha@alliancenews.com
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Zenith Energy (ZEN)