Panoro Energy has signed an agreement to sell 100% of its ownership in OML 113 to oil and gas exploration and production company PetroNor E&P.

Panoro holds a 6.502% participating interest and a 16.255% cost bearing interest in OML 113.

Under the agreement, PetroNor will acquire Panoro’s interest in OML 113 for $10m, which is expected to be paid in new PetroNor shares.

An additional $25m will be paid in contingent payments based on future gas production volumes.

PetroNor is also negotiating with Yinka Folawiyo Petroleum (YFP) on forming a new holding company (SPV), with PetroNor taking the lead technical and management role to develop the field’s next phases of the project.

PetroNor and YFP will own 45% and 55% respectively in the new entity SPV.

The Aje Field is 5% owned by ADM Energy. The field is part of OML 113, which covers an area of 835km² offshore Nigeria.

Depending on the execution and conclusion of an agreement with OML 113’s operator, the transaction is subject to the authorisation of the Nigerian Department of Petroleum Resources and consent from the Nigerian Minister of Petroleum Resources.

It is expected to be completed in the coming weeks.

ADM Energy CEO Osamede Okhomina said: “PetroNor entering the Aje project and taking a lead role in its future development is a strong endorsement of the viability of the asset and its significant potential upside.

“With its extensive offshore technical experience in oil and gas exploration, development and production, PetroNor can help bring near-term production growth and take Aje to the next stage of its development.”