Panoro Energy Acquires Various Tullow Oil Interests in EG and Gabon
OSE-listed Panoro Energy ASA has entered into two separate agreements with Tullow Oil Plc to acquire its 14.25% working interest in Block G, offshore Equatorial Guinea, as well as an additional 10% working interest in the Dussafu Marin permit, offshore Gabon, for a combined consideration of US$140 million plus certain additional contingent payments.
Under the terms of the EG transaction, Panoro will acquire a 100% stake in Tullow Equatorial Guinea Ltd. in exchange for an initial cash consideration of US$89 million, plus a contingent payment of up to US$16 million linked to asset performance and oil price.
Block G covers an area of 262 sq. km in the Rio Muni basin and is situated approximately 35 km off the coast of Equatorial Guinea, in water depths ranging between 50 and 850 meters. The block includes the Ceiba field and the Okume complex (Okume, Oveng, Ebano, Elon, and Akom North fields). Total 2P reserves attributable to the interest acquired in the block (as of June 30th, 2020) are 14.2 million barrels of oil (MMbbls), and production during H2-2020 averaged 4,600 barrels of oil per day (bbls/d).
As per the terms of the Dussafu deal, Panoro will increase its interest in the Dussafu Marin permit from 7.5% to 17.5% in exchange for an initial cash payment of US$46 million, plus a contingent payment of up to US$24 million. The permit covers an area of 850 sq. km within the Ruche Exclusive Exploitation Area (EEA) in the South Gabon basin, in water depths of around 116 meters.
The Dussafu Marin permit includes the Moubenga, Walt Whitman, Hibiscus, Ruche, Ruche North East, and Tortue fields, along with several other undrilled structures. Total 2P reserves attributable to the interest acquired in the block (as of June 30th, 2020) were 10.9 MMbbls, and production during H2-2020 averaged 1,450 bbls/d.
“These two very attractive and highly value accretive acquisitions perfectly complement our existing upstream E&P portfolio in West Africa and represent a major step in the execution of Panoro’s ambitious growth strategy to continue building a balanced full-cycle E&P company focused on Africa. We are proud and excited to strengthen our position in Gabon and to enter Equatorial Guinea and intend to deliver strong returns for all the stakeholders involved,” said Julien Balkany, Chairman of Panoro Energy.
“These are important, value accretive deals for Tullow that will have a positive effect on our financial position as we look to further reduce our net debt and continue constructive discussions with our creditors. These transactions are also in line with our strategy of investing our capital on cash-generative, high return investment opportunities in our core portfolio,” commented Rahul Dhir, CEO of Tullow Oil.
The acquisitions will be financed by Panoro through a combination of a contemplated US$70 million equity placement and an up to US$90 million underwritten debt facility by a Trafigura Group entity.
The transactions are subject to the receipt of regulatory, shareholders, and partner approvals, and are expected to close in H1-2021.