Scirocco Energy plc has agreed to sell its 25% non-operated interest in the Ruvuma gas asset in Tanzania for up to US$16 million to Wentworth Resources plc.
TERMS
The company owns a legacy 25% working interest in the project for which ARA Petroleum Tanzania (APT) is the operator.
The conditional binding agreement, subject to shareholder approval, includes an initial $3m payable on completion of the proposed transaction.
A further $3m will be paid on a final investment decision by the parties to the Ruvuma production sharing agreement (PSA) or the JOA [joint operating agreement].
Deferred consideration of up to $8m is payable with a 25% net revenue share from the point when Ruvuma begins delivery of gas to the buyer.
A contingent consideration of $2m will be paid on gross production reaching a level equal to or greater than 50Bcf.
Scirocco added that the total consideration represented more than 200% premium to the company’s current market capitalisation.
PORTFOLIO
“Completion of the proposed transaction follows a formal sales process for the asset and enables Scirocco to accelerate its strategy of building a portfolio of cash generative assets within the sustainable energy and circular economy sectors” said the company in a statement.
Chief executive Tom Reynolds described the deal as transformative, which had followed lengthy engagement with Wentworth and a two-year sales review process.
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