London-based exploration and production company Panoro Energy has signed two agreements to acquire $180 million in assets held by multinational Tullow Oil in Equatorial Guinea and Gabon.
Panoro Energy will acquire a 14.25% working interest in Equatorial Guinea’s Block G, operated by Trident Energy, and a 10% working interest in Gabon’s Dussafu Marin permit.
The $180-million sale of assets consists of up to $105 million for the Equatorial Guinea transaction, up to $70 million for the Gabon transaction and a further five million dollars to be paid after both transactions have been completed.
“It’s a transformational deal,” said John Hamilton, CEO, Panoro Energy. “We have incredibly supportive shareholders, who have encouraged us to grow. Sometimes the stars and the moon align, and we have had a great coming together with Tullow.”
In Equatorial Guinea, the transaction includes an $89 million upfront cash consideration, which is subject to customary completion adjustments and contingent cash payments of up to $16 million linked to asset performance and oil price. For the Dussafu Marin transaction, a $46-million upfront cash consideration will be paid, along with contingent cash payments of up to $24 million linked to asset performance and oil price.
According to Rahul Dhir, CEO of Tullow Oil, the agreements 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.”