Panoro Energy fully-owned subsidiary Pan-Petroleum Gabon signed a definitive Sale and Purchase Agreement (SPA) with BW Energy Gabon (BWEG), a subsidiary of BW Offshore, the global provider of floating production services to the oil and gas industry.
Under the terms of the SPA, Panoro will sell a 25% working interest in the Dussafu Production Sharing Contract (“Dussafu PSC”) in Gabon to BWEG for a total cash consideration of US$12 million. At closing of the transaction, Panoro will receive US$11 million in cash. The remaining US$1 million in cash will be paid no later than 30 December 2017.
Panoro will also receive a non-recourse loan from BWEG of up to US$12.5 million at 7.5% annual interest rate in order to fund all expenditures through to first oil production at Dussafu. Post-completion, Panoro will retain an 8.33% working interest in the Dussafu PSC. The total gross capital expenditure to reach first oil in 2018 is estimated to be a maximum of US$150 million.
The closing of the transaction is subject to customary conditions precedent, including but not limited to the approval of the Gabonese Government and the completion of the separate sale of Harvest Dussafu B.V. to BWEG. It is expected that the transaction will close in the first quarter of 2017.
Julien Balkany, Chairman of Panoro, said, “Panoro is very enthusiastic about this landmark transaction and our new innovative partnership with BW Offshore to create shareholder value.”
John Hamilton, Chief Executive Officer of Panoro, said, “Since entering the Dussafu concession in 2008, Panoro has drilled two discovery wells and acquired extensive seismic data. We are thrilled to see the development finally moving forward together with our new operating partner, BW Energy. This transaction strengthens our balance sheet with additional cash, and the non-recourse loan for the Dussafu development limits our financial exposure through to first oil.”
The Dussafu PSC has not been subject to separate financial reporting by Panoro and therefore no key figures from Panoro’s balance sheet and profit and loss account applicable to the Dussafu PSC are provided. In accordance with Panoro’s continued disclosure obligations, Panoro confirms that, in connection with this transaction, no agreements have been entered into for the benefit of the Panoro’s senior employees or members of the board of directors.