Panoro Energy subsidiary Pan-Petroleum Gabon has signed a definitive sale and purchase agreement (SPA) to sell a 25% working interest in Dussafu production sharing contract (Dussafu PSC) to BW Energy Gabon (BWEG) for the project in Gabon, Central Africa.
Under the SPA, Panoro will receive a total cash consideration of $12m.
Once the deal closes, Panoro will recieve $11m, while the remaining $1m will be paid no later than 30 December.
Panoro Energy chairman Julien Balkany said: “Panoro is very enthusiastic about this landmark transaction and our new innovative partnership with BW Offshore to create shareholder value.”
Completion of the transaction is subject to approval of Gabon’s Government and the finalising the sale of Harvest Dussafu to BWEG.
It is expected that the deal will close in the first quarter of 2017.
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Panoro Energy CEO John Hamilton said: “Since entering the Dussafu concession in 2008, Panoro has drilled two discovery wells and acquired extensive seismic data.
“We are thrilled to see the development finally moving forward together with our new operating partner, BW Energy.
“This transaction strengthens our balance sheet with additional cash, and the non-recourse loan for the Dussafu development limits our financial exposure through to first oil.”
Under the deal, Panoro will also receive a non-recourse loan of up to $12.5m at 7.5% annual interest rate from BWEG, which will be used to fund all expenditure on the first oil production at Dussafu.
After completion of this transaction, Panoro will retain an 8.33% working interest in the Dussafu PSC.
Panoro stated that the total gross capital expenditure to reach the field’s first oil is scheduled for next year, with an estimated value of $150m.
Panoro Energy holds multiple assets in West Africa that include the Dussafu licence in offshore southern Gabon and OML 113 offshore western Nigeria.