Scirocco Energy plc expects early revenues at the joint venture group Ruvuma gas project in Tanzania, with first gas now targeted for October 2023.
OPERATIONS
The company is still waiting to complete the sale of its 25% interest for up to $16 million to ARA Petroleum Tanzania (APT), before it leaves the oil and gas industry for the fertiliser sector.
Operations continue with a well-testing programme on the Ntorya-2 well (NT-2) scheduled for late March 2023, and negotiations nearing completion for a gas sales agreement.
An export pipeline from the Ntorya field to the Madimba gas plant is aimed to deliver gas by October 2023.
A development licence for the Ntorya Area will be issued following approval of a “near final” field development plan (FDP).
PROGRESS
Chief executive Tom Reynolds said that the acceleration of first gas revenue would result in receipt of contingent payments relating to the FID and the deferred consideration linked to a share of gas revenue.
“With regards to ongoing capex on the Ruvuma project, Scirocco’s exposure to these costs is covered by the loan facility agreed with APT.
“We continue to make progress towards completion although it is possible that this may slip into Q2 2023 rather than the previously guided timeframe of Q1 2023.”
TRANSACTION PAYMENTS
Scirocco will receive an initial payment of $3m following completion of the sale, which is now expected to be in Q2 2023.
A further $3m is payable on a final investment decision (FID) by the parties to the Ruvuma production sharing agreement or the JOA.
Up to $8m is payable in the form of a 25% net revenue share from when Ruvuma commences delivery of gas to the gas buyer.
A contingent consideration of $2m is payable on gross production reaching a level equal to or greater than 50bcf.