RE: Guercif….scratching the surface10 Aug 2023 13:29
Forward work programme
Based on an unsuccessful bid by management in 2017 for the Moruga west field, adjoining
and extending into Cory Moruga, the Company believes that there may be substantial
overlooked oil resources present in Cory Moruga and has prepared the technical material for
the independent Competent Persons Report contained in Part VII “Competent Persons’
Reports” of this Document.
Subject to and only with the consent of the MEEI for the acquisition of TRex, the next step
would be desktop design work for miscible CO2 EOR project for the Cory Moruga asset with
well planning for an additional appraisal/development well no earlier than Q3 2024 following
compilations and review of all available technical and environmental data. A Certificate of
Environmental Clearance will be required for CO2 EOR operations. This process is likely to
take six months to complete.
The parties having entered into fully termed long-form legal documentation on 8 March 2023
in relation to the binding term sheet with Challenger Energy Group PLC and relevant
subsidiary entities (“CEG”) as announced on 19 December 2022 (the “TRex Transaction”) and
have agreed to work together to secure the required consents and agreements with MEEI
and thus achieve completion as soon as reasonably practicable on or before 30 May 2023,
with a long stop date of 31 August 2023.
The Company announced on 1 June 2023 that the conditions for completion of the
transaction had not been satisfied as at 30 May 2023. Accordingly, the Company and
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Challenger mutually agreed to an extension of the 30 May 2023 target date for completion of
the intended transaction, to coincide with the long-stop date of 31 August 2023.
However, it is therefore unlikely that the process of re-negotiation of the commercial terms
and work programme for Cory Moruga will be completed and approved by the long stop date
of 31 August 2023. Re-negotiated terms and the work programme proposed by the Company
have to be approved by the Company before the TRex Transaction can complete after which
the consent of the MEEI will be required to go through a regulatory process of indeterminate
length of time.
On the basis of the above, currently no firm working capital commitments can be entered into
in relation to the TRex Transaction. Consequently, the Placing is not raising any funds for the
TRex Transaction.
The probable delay in completing the TRex Transaction provides the Company with different
options to settle the consideration for the acquisition of TRex through the issue of shares at a
later date or through the participation of an in-country peer company in the Cory Moruga
project prior to completing the TRex Transaction for a cash consideration equal to the amount
required to be paid by the Company on completion of the TRex Transaction.
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