Under the deal, Wentworth will make a $3m payment upon the closing of the transaction, followed by another $3m payment after making a final investment decision (FID) relating to the Ruvuma asset production sharing agreement.
Additional payments will be made upon first gas delivery from the project and after meeting a gross production target.
Scirocco will also receive up to $6.3m as a loan from Wentworth to meet all cash calls pertaining to the Ruvuma joint operating agreement.
Scirocco CEO Tom Reynolds said: “This is a transformative deal that follows lengthy engagement with Wentworth and a two-year sales review process.
“The deal enables Scirocco to crystallise firm value from this asset, which can be deployed into compelling opportunities in line with the company’s strategy to focus on opportunities within sustainable energy and the circular economy.”
Scirocco said the sale would eliminate the need to raise capital to fund the Ruvuma work programme.
The sale complies with Scirocco’s strategy to divest oil and gas assets and shift focus towards the circular economy and sustainable energy assets.
The Ruvuma asset comprises the Ntorya-1 discovery well and the Ntorya-2 appraisal well.
The Ntorya gas discovery is located adjacent to Wentworth’s Mnazi Bay gas-producing asset, located onshore the Rovuma basin in Tanzania.
Wentworth CEO Katherine Roe said: “This is a transformational transaction for Wentworth, establishing us as a dual-asset, full-cycle E&P, with a significantly enhanced resource base and production profile.
“The deal represents an attractively priced, low risk entry into a high growth opportunity, which cements our position as a leading supplier of domestic gas to Tanzania.”
The acquisition forms part of Wentworth’s strategy to improve scale and growth, with a focus on Tanzanian natural gas projects.
Planned to be closed before 30 June 2023, the transaction is subject to approval from Scirocco’s shareholders, certain regulatory approvals, and the non-exercise or waiving of pre-emption rights by the other Ruvuma Asset JOA partners.