RE: ENOG rns today29 Aug 2024 12:55
..... OR read here for summary :---
4.1.8 Anchois Farm-In Agreement
On 7 December 2023, Energean entered into a farm-in agreement with Chariot Limited ("Chariot") (the "Farm-In Agreement") pursuant to which Energean agreed to farm into a 45% working interest in the Lixus offshore licence, which contains the Anchois gas development (Chariot 30%, ONHYM 25%), and a 37.5% working interest in the Rissana licence (Chariot 37.5%, ONHYM 25%). Completion of the Farm-In Agreement was announced in April 2024, following receipt of the requisite approvals from the Moroccan Authorities. Pursuant to the Farm-In Agreement, Energean has assumed operatorship for both licences.
As consideration for the interests in the licences, Energean agreed to:
· pay $10 million cash consideration on closing of the transaction;
· carry Chariot for its share of pre-FID costs (which are recoverable from Chariot's future revenues, see terms below), up to a gross expenditure cap of $85 million, covering drilling of the appraisal well, all other pre-FID costs and up to $7 million of seismic expenditure on the Rissana licence; and
· pay $15 million in cash, which is contingent on FID being taken on the Anchois Development.
Following the drilling of the appraisal well, Energean has the option to increase its working interest in the Lixus licence (which includes the Anchois development) by 10%, to 55%. On exercise of this option, the amount payable would be:
· Chariot's choice between either (i) a 5-year, $50 million of convertible loan notes with a GBP20 strike price and 0% coupon; or (ii) 3 million Energean plc shares, issued immediately upon exercise of the option but subject to a lock-up period until the earlier of first gas and 3 years post FID;
· Energean will pay to Chariot a 7% royalty for every dollar achieved on gas prices (post transportation costs) in excess of a base hurdle; and
· An agreement to carry Chariot's 20% share of development costs for the Anchois development with the following terms (i) a net expenditure cap of $170 million, (ii) the carry available for development costs is reduced by costs carried in the pre-FID phase; and (iii) all carried amounts are recoverable from 50% of Chariot's future revenues with interest charged at SOFR + 7%.
If the option is not exercised, subject to FID, the partners have agreed to progress the Anchois development with an ownership structure of Energean 45%, Chariot 30%, ONHYM 25%. All amounts carried by Energean on behalf of Chariot would be recoverable from Chariot's future revenues under the same terms as above.
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