Panoro Energy has sold off all its interest in OML 113 Nigeria to PetroNor Exploration & Production Ltd, listed on the Oslo Axess.
The former would divest all outstanding shares in its fully owned subsidiaries Pan-Petroleum Services and Pan-Petroleum Nigeria for an upfront consideration consisting of the allotment and issue of new PetroNor shares with a fixed value of $10 million plus a contingent consideration of up to $25 million based on future gas production volumes.
A statement from Panoro Energy yesterday said the divested subsidiaries hold 100% of the shares in Pan-Petroleum Aje Ltd, which participates in the exploration and production of hydrocarbons in Nigeria and holds a 6.502% participating interest, with 16.255% cost bearing interest, representing an economic interest of 12.1913% in Offshore Mining Lease no. 113.
Following the completion of this transaction, the Chief Executive Officer of Panoro, John Hamilton, said his company will no longer have presence in Nigeria. “We are extremely pleased to have reached this win-win agreement with PetroNor that perfectly suits both parties’ ambitions.
“Aje was a non-core asset for Panoro and allows us to further focus on expanding our organic operations in Tunisia and Gabon while retaining exposure to the considerable upside at OML 113 through the deferred consideration. We are very confident that PetroNor has the technical and financial capabilities along with the depth of expertise and vision to advance further the next ambitious development phases of Aje in a smooth and efficient aligned partnership with the operator, YFP,” Hamilton said
Further in the agreement, PetroNor has an option to pay a portion of the share consideration in cash, in an event PetroNor’s share price reduces to less than US$ 0.13 per share 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,” the statement said.
Meanwhile, completion of the transaction is conditional upon completion of the agreements between PetroNor and YFP, the authorisation of the Nigerian Department of Petroleum Resources (DPR) and the consent of the minister of petroleum resources.