Last checked at 21 Jul 2022 07:00
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Pennpetro Energy PLC
("Pennpetro" or the "Group")
Farm-In to Saouaf Permit, Tunisia and Share Issuance
London, 21 July 2022 - Pennpetro, an independent oil and gas company focusing on development of the Gonzales Oil Field in Texas, USA, today announces that, through its wholly owned subsidiary enterprise, Nobel Petroleum USA Inc ("NPUSA"), the Group has signed a Farmout Agreement ("Agreement") with Upland (Saouaf) Limited ("Upland Saouaf"),an Upland Resources Limited ("Upland") subsidiary, for a farm-in ("Farm-In") to its Saouaf permit area, Tunisia ("Saouaf Permit"), held in joint venture with the Tunisian state oil company, Enterprise Tunisienne d'Activités Pétroliéres ("ETAP"). Pennpetro had earlier announced the signing of a Heads of Terms agreement with Upland on 16 March 2022.
Farm-In
NPUSA will farm-in for an 80% working interest and assume operatorship, subject to ETAP approval. NPUSA and Upland will jointly seek from the Tunisian authorities a one-year extension ("Extension") to the Saouaf Permit to allow sufficient time to undertake the current prospective work programme which expires on 23 December 2022 ("Expiry Date"), consisting of an obligation to acquire 300 km of new 2D seismic data and reprocessing some existing 2D seismic data. Extension negotiations have already been initiated referencing the Hydrocarbon Code of Tunisia.
NPUSA will be appointed as the Operator for the Saouaf Permit and a formal Operating Agreement will be executed. The working interests of NPUSA and Upland Saouaf (interest carried by NPUSA) up to the Expiry Date are as follows:
· Nobel Petroleum USA, Inc. 80%
· Upland Saouaf 20%
The Saouaf Permit can, under its priority rights, be converted into an exploration permit at the Expiry Date. In the three years following that Expiry Date, the exploration work programme requires the acquisition of 150 km of 2D seismic and the drilling of one exploration well to reach the M'cherga formation or equivalent to a minimum depth of 1500m.
Upon the conversion to the Exploration Permit, the working interests will be as follows:
· Nobel Petroleum USA, Inc. 40%
· ETAP 50%
· Upland Saouaf 10%
Upland Saouaf has been granted an arrangement whereby they may purchase up to 25% of the NPUSA Exploration Permit working interest on certain terms, subject to the approvals of the Tunisian authorities and subject to making a cash payment to Pennpetro of a 250% premium of the work programme funds expended by NPUSA.
Subject to Extension, Pennpetro has agreed to reimburse Upland for 80% of its prior sunk costs in Tunisia, amounting to £310,225. This will be paid through the issue of fully paid ordinary shares in Pennpetro ranking pari passu with other ordinary shares in Pennpetro at a deemed value of the higher of either £0.28 each or 10% discount to the closing mid-market pricing of the Company's shares on the date of the Company's RNS confirming the Extension.
Tom Evans, CEO of Pennpetro Energy plc, commented:
"We are excited to finalize our partnership with Upland in their Tunisian venture with the execution of this farm-in. Upland has done a lot of excellent technical and commercial work to this point and have built a very good relationship with the Tunisian authorities. There is a critical need for additional gas and blue hydrogen supplies to Europe, especially given that the Saouaf permit area is situated under the existing TransMed gas pipeline, which feeds gas from Algeria to Italy and has spare capacity.
The Sauoaf permit area hosts 10 gas prospects and leads with up to 15.2 trillion cubic feet gross potential in multiple targets. The risked resource, independently audited by highly respected third-party engineers, is 420 billion cubic feet of gas plus 1.6 million barrels of oil equivalent net to Pennpetro. The Pyrite prospect offers an opportunity to open up an exciting new play in the area.
Andy Clifford, President of our wholly owned subsidiary, Nobel Petroleum USA Inc., is excited for Nobel to assume operatorship of the permit and to carry on the good work done by the Upland team. He is exceptionally well qualified to oversee the future work programme, having over 43 years of worldwide industry experience, including leading negotiating efforts in North Africa and oil discoveries in Algeria for major oil companies.
Pennpetro and Nobel are evaluating several other Gulf Coast opportunities that will provide synergies with our ongoing Gonzales development, which we remain very excited about and which we hope to revitalize by the end of this year."
Share Issuance
The Company has issued 952,268 shares to its $20 million facility provider GEM Yield Bahamas in respect of agreed fees. Application will be made for admission of the Issued Shares to the standard listing segment of the Official List and for admission to trading on the London Stock Exchange's Main Market for listed securities. It is expected that admission will take place at 8.00am on 26 July 2022 and that dealings in such shares will commence at the same time.
Total Voting Rights
Following the issuance of the Shares, the Company's issued share capital will comprise 84,404,374 ordinary shares of £0.01 each. The total number of voting rights in the Company following the issuance of Shares will be 84,404,374. This figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interests in, or a change to their interest in, the share capital of the Company under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.
-ENDS-
This announcement contains inside information within the meaning of Article 7(1) of (i) Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014, as amended (the "EU Market Abuse Regulation") and (ii) the EU Market Abuse Regulation as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.
Enquiries
Pennpetro Energy plc tme@pennpetroenergy.co.uk
Thomas Evans
Peterhouse Capital Limited
Lucy Williams + 44 (0) 20 7469 0930
Duncan Vasey + 44 (0) 20 7220 9797
Instinctif Partners pennpetro@instinctif.com
Galyna Kulachek +44 (0) 20 7457 2020
Sarah Hourahane
NOTES TO EDITORS
Pennpetro Energy is an independent oil and gas company focusing on production in the Gonzales Oil Field in Texas, USA. Shares in the company were admitted to the Official List of the London Stock Exchange by way of a Standard Listing on 21 December 2017.
Further information on the Company can be found at www.pennpetroenergy.co.uk