(Alliance News) - Energean PLC announced a farm-in agreement with Chariot Ltd on Thursday, the FTSE 250 listing's first foray into Morocco.
Energean, a Mediterranean-focused hydrocarbon exploration and production company, said the tie-up with the Africa-focused transitional energy firm Chariot will involve the development and exploration of Moroccan offshore gas.
Energean said: "This new country entry is well-aligned with Energean's strategy to become the pre-eminent independent producer in the Mediterranean."
The focal point of the venture is the Anchois gas field, which boasts 18 billion cubic metres of gross gas resources.
Energean will snap up a 45% of the Lixus offshore licence, where Anchois is located. Lixus covers an area of approximately 1,794 square kilometres. The pair plan to drill an appraisal well in 2024, after which Energean will have the option to increase its holding to 55%.
Upon exercise of this option, Chariot would be able to choose as payment either a five-year, USD50 million convertible loan notes, or three million Energean shares issued immediately upon exercise.
Energean will also farm into just under 38% of the Rissana licence and assume operatorship of it and Lixus.
Energean Chief Executive Officer Mathios Rigas said: "These assets are particularly attractive as we understand the core geological, commercial and political drivers of the region."
In exchange, Chariot will receive an up-front cash consideration of USD10 million once the transaction is closed, and will retain stakes of 30% and just under 38% in Lixus and Rissana, respectively.
Morocco's Office National des Hydrocarbures et des Mines owns 25% of each licence.
Chariot Chief Executive Officer Adonis Pouroulis said: "In Energean, we have secured a partner with a proven track record of rapidly building and delivering this kind of offshore development. Energean also shares our view that Anchois and its surrounding acreage offers significant upside potential and we are aligned with our plans moving forward."
Chariot shares were down 9.3% at 12.42 pence each in London on Thursday morning. Energean was down 3.4% at 995.00 pence each.
By Hugh Cameron, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Energean Oil & Gas (ENOG)
Chariot (CHAR)