(Sharecast News) - Capricorn Energy updated the market on Wednesday, after Woodside Petroleum announced the departure of the floating production, storage and offloading (FPSO) vessel from Singapore for the Sangomar field development, offshore Senegal.
The London-listed firm said the development could lead to it receiving a contingent payment of either $25m or $50m, as stipulated in the sale and purchase agreement.
It said the contingent payment's eligibility depended on the average Brent oil price during the first six months of production surpassing the thresholds of $55 per barrel or $60 per barrel, alongside the achievement of first oil in the first half of 2024.
Should first oil occur before 30 June 2024, it was expected that the contingent payment would be disbursed in early 2025, following the determination of the average oil price and a continuous 30-day period of production.
Capricorn said first oil was defined as the initial continuous 72-hour production period from the Sangomar Field, during which a minimum of 30,000 barrels was produced for sale.
In either scenario, Woodside would not be obliged to make an additional payment if the average Brent oil price remained equal to or below $55 per barrel, or if first oil production extended beyond the first half of 2024.
Reporting by Josh White for Sharecast.com.
Capricorn Energy PLC (CNE)