The consideration implies a gross (100%) value of up to US$115 million for the Assets and consists of US$5 million cash at completion of the Transaction
Pharos Group to farm-out and sell interest and operatorship in Egyptian El Fayum and North Beni Suef Concession. (Credit: Michael Gaida from Pixabay.)
Pharos Energy plc, an independent oil and gas exploration and production company, is pleased to announce that the Pharos Group has entered into conditional agreements for the farm-out and sale of a 55% working interest and operatorship in each of the Egyptian El Fayum and North Beni Suef Concessions (the “Assets”) to IPR Lake Qarun Petroleum Co. (“IPR Lake Qarun”), a wholly owned subsidiary of IPR Energy AG (“IPR”) (the “Transaction”).
The consideration implies a gross (100%) value of up to US$115 million for the Assets and consists of US$5 million cash at completion of the Transaction, funding of the Pharos Group’s retained interest share of the cost of future activities on the Assets for US$38.425 million net (subject to working capital and interim period adjustments from the economic effective date of 1 July 2020), and contingent consideration of up to US$20 million dependent on Brent oil prices in each of the 4 calendar years from 2022 to 2025.
Pharos to sell a 55% working interest and operatorship in the producing El Fayum Concession and in the North Beni Suef Concession
The Transaction implies a gross value of up to US$115 million for the Assets, dependent on the Brent Price contingent consideration
Firm consideration of US$5 million upon completion of the Transaction
Disproportionate funding by IPR Lake Qarun of US$38.425 million of costs net to Pharos (to be adjusted for working capital and interim period adjustments from the economic effective date of 1 July 2020)
Additional contingent consideration of up to US$20 million dependent on the Brent Price from 2022 to the end of 2025 (with floor and cap at US$62 / bbl and c. US$90 / bbl, respectively)
Expected to strengthen the Pharos Group’s balance sheet and enable a more comprehensive and quicker development of the El Fayum Concession, as well as testing of the low risk North Beni Suef Concession at low cost to Pharos through a sustained drilling programme
Completion currently expected Q1 2022
Ed Story, Chief Executive of Pharos, said: “I am extremely pleased to be able to announce the farm-out of a 55% operated interest in each of our Egyptian Concessions, El Fayum and North Beni Suef, to IPR, a group which has extensive experience in Egypt. The farm-out, while instantly boosting our balance sheet, will allow the entry of a partner who has committed to carry Pharos on a capital programme on these Egyptian assets, which will in turn lead to increased production, helping to fulfil the full potential of the concessions.”
Source: Company Press Release