Page 23 - AfrOil Week 01 2021

AfrOil NEWS IN BRIEF AfrOil

As previously announced, following comple- Nationale des Pétroles du Congo (SNPC). November 17, 2020. Since VAALCO currently
tion of the Transaction, Panoro’s intention is Andrea Cattaneo, CEO of Zenith, com- owns and operates a 31.1% working interest
to declare a special dividend and distribute to mented: “Zenith’s selection by the Ministry of in Etame, the transaction will almost double
its shareholders $10mn equivalent in Petronor Hydrocarbons of the Republic of the Congo as VAALCO’s total production and reserves.
shares in order for Panoro shareholders to retain the successful bidder for Tilapia II is an excep- CEO Cary Bounds commented: “We are
a direct listed exposure to Aje/OML 113. tional achievement and is the product, amongst excited to move forward with this very attrac-
PetroNor had also in 2019 entered into sep- other qualities, of our unwavering commitment tive and value-accretive acquisition. Based on
arate agreements with the OML 113 operator and perseverance in pursuing our development production performance in November, our pro-
Yinka Folawiyo Petroleum (YFP) to create a strategy. The Company is now positioned to duction capacity, including volumes acquired
holding company to exploit the substantial benefit from a potentially transformational from Sasol, would be over 9,000 barrels of oil
gas and liquids reserves at Aje. The regulatory asset with highly prospective development and per day and with the recent increase in oil pric-
process for this agreement is aligned with the exploration potential in a prolific hydrocarbon ing, this should significantly boost our free cash
Transaction and is expected to be approved basin where we shall be able to deploy our drill- flow profile in 2021. In addition, this transaction
concurrently. ing equipment to perform operational activities is lowering our breakeven cost per barrel by
Panoro and PetroNor have also taken the in agreement with our local partners at a time of increasing production with minimal increases
opportunity to review the deferred contin- increasing recovery in oil prices. to G&A expense. While we are disappointed
gent element of the Transaction, reflecting the “Further, it is a matter of great satisfaction that we will not be participating in Block DE-8,
changed macro-economic background since the that the Company has been able to resoundingly this eliminates the cost to drill the appraisal well,
original announcement in 2019. Under the orig- vindicate its confidence in its ability to achieve its thereby reducing our overall capital commit-
inal agreement, once PetroNor had recovered publicly announced objectives in the Republic of ment in 2021 by between $7mn and $9mn and
all its costs related to their future investments to the Congo, specifically in relation to Tilapia II. removes the $1mn potential contingency obli-
bring Aje gas into production, PetroNor was to The Company can now look forward with well- gation. We are even more confident in the future
pay to Panoro additional consideration of $0.15 grounded confidence to the journey ahead in the for VAALCO and this acquisition coupled with
per 1,000 cubic feet of the natural gas sales, such Republic of the Congo and the possible achieve- the new proprietary 3-D seismic data we are pro-
additional consideration being capped at $25mn. ment of other publicly announced objectives, cessing over the entire Etame Marin block will
The amended terms are for the consideration to including the potential acquisition of additional allow us to maximise the value of our Gabon
be $0.10 per 1,000 cubic feet, with the additional oil production assets, as well as obtaining repay- resources. We are well positioned to profitably
consideration being capped at $16.67mn. ment of the approximately $5.7mn owed to the grow and generate free cash flow in the near and
All other terms and conditions of the Trans- Company by SNPC.” long-term which should enhance value for our
action remain unchanged. Zenith Energy, December 23 2020 shareholders.”
Prior to the closing of the acquisition, VAAL-
Panoro Energy, December 31 2020 CO’s working interest in Etame is 31.1% and its
Zenith Energy makes VAALCO announces Etame participating interest is 33.6%; Sasol’s working
acquisition update
interest in Etame is 27.8% and its participating
successful bid for Tilapia II VAALCO Energy has announced that, in con- interest is 30%. All NRI production rates and
volumes are based on working interest less 13%
Zenith Energy Ltd, the listed international oil nection with VAALCO’s previously announced royalty volumes. Sasol’s participating interest in
and gas production company focused on pur- acquisition from Sasol Gabon of Sasol’s 27.8% DE-8 is 40% and its working interest is subject to
suing African development opportunities, is working interest in the Etame Marin block government rights for a 20% carried interest and
delighted to announce that it has received offi- offshore Gabon, the other joint owners in the 10% back-in interest.
cial confirmation from the Ministry of Hydro- Etame Marin block have not exercised their VAALCO Energy, December 21 2020
carbons of the Republic of the Congo that its pre-emptive rights. As a result, VAALCO will
local subsidiary, Zenith Energy Congo, has been now move forward with acquiring Sasol’s entire
selected as the successful bidder for the award working interest in the field.
of a new 25-year licence to operate the Tilapia In regard to Block DE-8 offshore Gabon, the
oilfield (Tilapia II). 60% operated participating interest owner, Per-
As announced to the market on July 20, 2020, enco, has exercised its preferential rights. As a
the Company had previously submitted a com- result, Perenco is acquiring Sasol’s 40% non-op-
prehensive commercial and technical offer for erated participating interest, releasing VAALCO
the award of Tilapia II. from the potential obligation to drill an appraisal
In accordance with Congolese procedures well. VAALCO will not be subject to any con-
for the award of new hydrocarbon licences, the tingency payments due regarding Block DE-8.
award of Tilapia II is subject to completion of an The terms of the sale and purchase agreement
inquiry of public utility (enquête d’utilité pub- did not attribute a material value to the undevel-
lique, or IPU) to be organised and performed by oped resource at Block DE-8, as such, the pur-
the Ministry of Hydrocarbons during the month chase price for Sasol’s 27.8% working interest of
of January 2021, as well as the subsequent poten- $44mn less customary post-effective date adjust-
tial finalisation and ratification of the Produc- ments has not changed. The maximum future
tion-Sharing Contract (PSC) for Tilapia II. contingency payments have been reduced from
Under the envisaged terms of Tilapia II, $6mn to $5mn.
Zenith Congo will operate Tilapia II in partner- Additional details regarding the transac-
ship with the National Oil Company, Société tion were included in a news release issued on

Week 01 06•January•2021 www. NEWSBASE .com P23