Panoro Energy, an independent exploration and production company based in London has reached an agreement to extend a clause known as the ‘long stop date’ for the previously announced sale of its fully owned subsidiaries in OML 113 and the Aje oil and gas field, offshore Nigeria.
According to Panoro Energy, the previous schedule for the long stop date was December 31, 2020, pending authorisation from the Department of Petroleum Resources (DPR) and consent from the office of Nigeria’s Minister of Petroleum Resources.
“The regulatory approval process in Nigeria is well underway but has been delayed by the COVID-19 pandemic. The process is in an advanced stage and is expected to resume following the holiday period and to complete afterward,” Panoro Energy said in a statement.
In the approach to the long stop date under the law, if some specific conditions are not ultimately fulfilled by a certain agreed date, the contract terminates automatically.
“The amended long stop date to complete the Transaction is now June 30, 2021,” Panoro Energy said.
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Panoro Energy explained that the company plans to declare a special dividend and distribute to its shareholders $ 10 million equivalent in Petronor shares in order for Panoro shareholders to retain a direct listed exposure to AJE/OML 113.
Petronor had also in 2019 entered into separate agreements with the OML 113 operator Yinka Folawiyo Petroleum ( YFP) to create a holding company to exploit the substantial gas and liquids reserves at Aje.
“The regulatory process for this agreement is aligned with the Transaction and is expected to be approved concurrently,” Panoro Energy said.
Panoro and Petronor have also taken the opportunity to review the deferred contingent element of the Transaction, reflecting the changed macro-economic background since the original announcement in 2019.
Under the original agreement, once Petronor had recovered all its costs related to their future investments to bring Aje gas into production, Petronor was to pay to Panoro additional consideration of $0.15 per 1,000 cubic feet of the natural gas sales, such additional consideration being capped at $25 million.
The amended terms are for the consideration to be $0.10 per 1,000 cubic feet with the additional consideration being capped at $16.67 million.
