Panoro Energy provides an update on the divestment of the Aje field in Nigeria
On June 18, 2013 Panoro Energy ASA (“Panoro”) announced that its wholly-owned subsidiary Pan Petroleum Aje Limited (“PPAL”) had entered into a Sale and Purchase Agreement (SPA) with the Nigerian company Lekoil 113 Nigeria Limited (“Lekoil”) for Panoro’s 6.502% participating interest in the OML113 license offshore Nigeria (the “Participating Interest”). The consideration for the transaction was US$30 million, with a working capital adjustment date of January 1, 2013, and the agreement required funding of the consideration into an escrow account by September 15, 2013. On September 16, 2013 Panoro announced that PPAL had entered into an agreement with Lekoil to postpone the escrow funding deadline to October 31, 2013 with release of funds to Panoro’s account on November 9, 2013. A US$3 million deposit was paid to Panoro at this time, which was deductible from the final balance payable by Lekoil.
Lekoil has now informed Panoro that the process for securing the financing for the transaction is advanced but not yet complete. Consequently Lekoil has requested some additional time. Panoro has agreed to change the funding deadline till November 6, 2013 on the basis that the funds will no longer be paid into the escrow account but directly to Panoro. As a further deposit for the deadline extension, Lekoil has paid US$1 million into Panoro’s bank account. This further deposit is also deductible from the final balance payable by Lekoil (i.e. the overall purchase price remains unchanged). Lekoil has now paid US$4 million to Panoro out of the US$30 million consideration.
If the remaining consideration of US$26 million (plus an additional amount of approximately US$ 1 million of working capital adjustment) is not deposited into Panoro’s account by November 6, 2013, the existing bid bond of US$3 million remains callable. In this scenario PPAL will be entitled to terminate the SPA, retain the US$4 million already paid into Panoro’s bank account, and in addition call the US$3 million from the bid bond.
If the remaining consideration is received in full by November 6, 2013, a financial and technical services agreement (the “FTSA”) will be immediately effected. Under the FTSA, Lekoil will obtain the economic and commercial rights and obligations with respect to the PPAL’s Participating Interest in OML113. PPAL would then seek government approval to assign the Participating Interest to Lekoil and once this process was completed, the FTSA would terminate automatically.
For further information, please contact:
Carl Peter Berg, VP Commercial and Investor Relations Cell: +55 21 98541 1907
Email: carl.peter.berg@panoroenergy.com
Nishant Dighe, Chief Operating Officer Cell: +44 7747807439
Email: nishant.dighe@panoroenergy.com
Please visit www.panoroenergy.com for more information. Panoro Energy ASA is listed on the Oslo Stock Exchange (Ticker code: “PEN”).