Panoro Energy provides an update on the divestment of the Aje field in Nigeria

Panoro Energy ASA announced on June 18, 2013 that its wholly-owned subsidiary Pan Petroleum Aje Limited (“PPAL”), had entered into a Sale and Purchase Agreement (the “SPA”) with the Nigerian company Lekoil 113 Nigeria Limited ( “Lekoil”) for the sale of Panoro’s 6.502% participating interest in the OML113 license offshore Nigeria for a consideration of US$30 million.

Under the terms of the SPA, Lekoil was required to deposit into an escrow account the cash consideration of US$30 million plus certain costs incurred from January 1, 2013. Once these funds were deposited by Lekoil, PPAL was to seek government approval for the transaction and other required consents. At the time of entering into the SPA, Lekoil also provided a US$3 million bid bond for the transaction callable by PPAL in the event that Lekoil did not fund this escrow account by September 15, 2013.

Lekoil has informed Panoro that it is in the process of securing funding for the transaction, but has requested some additional time to deposit the required funds into the escrow account. The parties have therefore reached an agreement whereby the escrow funding deadline is postponed from September 15, 2013 to October 31, 2013. To compensate for the extended deadline, Lekoil has paid a US$3 million cash deposit into Panoro’s bank account.  This deposit is deductible from the final balance payable by Lekoil (i.e. the overall purchase price remains unchanged). In addition, the original US$3 million bid bond has been replaced by a new US$3 million bid bond which is callable by PPAL if the required funds are not deposited into the escrow account by October 31, 2013. If Lekoil do not fund the escrow account by October 31, 2013 , PPAL will be entitled to terminate the SPA, retain the $3 million already paid into Panoro’s bank account, and in addition call the US$3 million from the new bid bond.

If Lekoil do fund the escrow account by October 31, 2013 but the transfer of the OML113 participating interest has not occurred by November 9, 2013, the SPA provides for the full purchase consideration to be released from the escrow account to PPAL at that time and for a financial and technical services agreement (the FTSA) to take effect in respect of PPAL’s interest in OML 113. Under the FTSA, Lekoil obtains the economic and commercial rights and obligations with respect to the PPAL’s interest in OML113. The FTSA would terminate immediately upon completion of transfer of the participating interest to Lekoil. The additional time provided by Panoro to Lekoil to fund the escrow account does not affect the date of release of the purchase consideration and for the FTSA to take effect i.e. it remains November 9, 2013.

For further information, please contact:
Nishant Dighe, Chief Operating Officer, Cell: +44 7747807439

Email: nishant.dighe@panoroenergy.com

Carl Peter Berg, VP Commercial and Investor Relations, Cell: +55 21 8541 1907
Email: carl.peter.berg@panoroenergy.com

Please visit www.panoroenergy.com for more information. Panoro Energy ASA is listed on the Oslo Stock Exchange (Ticker code: “PEN”).