RE: Panoro Energy Announces Agreement for the Sale of all its Interest in OML 11321 Oct 2019 21:17
Further Information
Under the terms of the Transaction, PetroNor has an option to pay a portion of the Share Consideration in cash, in an event PetroNor’s share price reduces to less than US$ 0.13 per share (based on the current number of shares in issue), at the time of completion of the Transaction.
By its indirect acquisition of Pan Aje, PetroNor will with effect as of 30 June 2019, assume all the benefits and obligations in relation to Panoro’s interest in the OML 113 operations.
Concurrently, PetroNor is in the process of finalising separate agreements with the OML 113 operator Yinka Folawiyo Petroleum (“YFP”) to create a new holding company. PetroNor will assume a lead technical and management role in order to progress the next phases of the project. Together these agreements provide the framework and pathway towards sanction of the next phases of the Aje project in order to exploit the substantial gas and liquids reserves and unlock its significant value.
Completion of the Transaction is conditional upon the execution and completion of the agreements between PetroNor and YFP, the authorisation of the Nigerian Department of Petroleum Resources and the consent of the Nigerian Minister of Petroleum Resources. Securing the authorisation and consent is expected to take several months with a long stop date agreed by the parties of 31 December 2020, following which either party is entitled to terminate the Transaction.
Following completion of the Transaction, subject to the terms agreed with PetroNor on a best efforts basis, Panoro’s intention is to declare a special dividend and distribute the Share Consideration, to the extent received in shares, to its shareholders. Further information about such a possible dividend, including the applicable record date, will be given in connection with completion of the Transaction.
Once Pan Aje has recovered all costs related to the accumulated investments incurred after the date of completion, PetroNor must pay to Panoro additional consideration of US$ 0.15 per 1,000 cubic feet of the Aje Natural Gas Sales Volume, such additional consideration being capped at US$ 25 million (the “Contingent Consideration”).
The Transaction is expected to generate a net gain for Panoro which will be accounted for in the Financial Statements of Panoro upon closing of the Transaction. The final amount will depend on the Contingent Consideration.
Following completion, Panoro’s production and reserve numbers will be adjusted to reflect the sale.
Julien Balkany, Chairman of Panoro, commented: “Panoro has been reviewing options in relation to its Nigerian assets with the objective of potentially unlocking value of OML 113 for its shareholders. This divestment is consistent with Panoro’s strategy to optimize its E&P portfolio. In addition, through the contemplated distribution of PetroNor shares to Panoro shareholders, this transaction provides Panoro’s shareholders with the opportunity to directly retai
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