H2Oil Acquires Prospex's 50% Interest in Romanian Exploration Block
Privately-held oil field services company H2Oil Ltd. has signed a Sale and Purchase Agreement (SPA) with AIM-listed Prospex Energy Plc to acquire 100% of its wholly-owned subsidiary, PXOG Massey Ltd., whose sole asset is a 50% interest in the economic rights of the EIV-1 Suceava exploration concession in Romania.
Under the terms of the SPA, H2Oil will acquire the entire share capital of PXOG Massey in exchange for a total consideration of £215,000 in settlement of historical debt owed to Prospex by PXOG Massey (of which £182,650 has already been paid). Of the remaining £32,350, almost half will be released to Prospex upon reaching a production milestone at the Bainet field, and the other half will be retained against general warranties and will be released should no claims arise in 6-months once normal operations have resumed.
The EIV-1 Suceava concession covers an area of 984 sq. km located in north-east Romania, and is currently operated by Raffles Energy SRL with a 50% working interest. The concession contains the Bainet field, which was discovered in late 2017 and commenced production in September 2019. In addition, it also contains the producing Climauti and Dornesti South gas fields, which are operated by Raffles Energy but are not part of the exploration area in which Prospex held an interest. Average daily production from the EIV-1 Suceava concession during the first half of 2020 was 15 thousand cubic meters of gas per day (Mcm/d) net to PXOG Massey’s 50% interest.
UK-based H2Oil provides upstream oil & gas services including well testing, well site supervision, full scope equipment supply and packaged services. The transaction with Prospex marks the company’s entry into the upstream production sector.
London-based Prospex is focused on high impact onshore and shallow offshore exploration and development opportunities in Europe, and currently holds interests in projects in Spain and Italy.
“The sale of our 50% interest in Suceava follows a long-term strategic review of our extensive portfolio. With the acquisition of El Romeral at the start of the year and with it the proposed addition of another 11 high quality, very low risk prospects it became clear that Suceava would be less core as time progressed. As well as providing useful capital, the sale will therefore bring more focus to the remaining core projects in our portfolio, all of which have the potential to hold company-making volumetrics and, importantly, multiple targets that could unlock the substantial resources we have identified,” said Edward Dawson, Managing Director of Prospex.
The completion of the transaction is subject to customary closing conditions, including regulatory sign-offs and the receipt of approval for the change of control of PXOG Massey, and will have an effective date of September 1st, 2020.