PetroNor E&P ASA has completed the farm-down transaction of its Guinea Bissau assets in west Africa with Apus Energy DMCC, a Dubai-based joint venture majority owned by Petromal LLC.
Apus has initiated the payment of $23 million for past license costs and long-lead items purchased for drilling, PetroNor said in a recent statement.
The government of Guinea Bissau approved the transfer of the Sinapa, or Block 2, and Esperança or Blocks 4A and 5A, license interests to Apus in October 2023. PetroNor said it expects the drilling of an exploration well to test the Atum-1 prospect in the second quarter. In case of a successful well, PetroNor will receive two contingent earn-out payments of $30 million each, contingent upon government approval of a field development plan and sustained production, respectively, according to the statement.
In June 2023, PetroNor subsidiary PetroNor E&P AB, entered into a binding agreement to farm-out 100 percent of its participating interest in the two exploration licenses offshore Guinea-Bissau to a special purpose vehicle owned by Apus. Under the agreement, PetroNor will receive a payment of up to $85 million divided into a contribution towards past license costs of at least $ 25 million at the completion of the transaction, and a further entitlement to two contingent earnout payments of $30 million each. The assets will be assigned to Apus Energia Guiné Bissau SA, which is owned by the Apus joint venture. Petromal owns the majority of the joint venture and is also the largest PetroNor shareholder, with an ownership of almost 34 percent.
“Today’s agreement marks an important milestone for PetroNor and for Guinea-Bissau as completion of the transaction will add significantly to PetroNor’s balance sheet and lead to the drilling of an exploration well during the first half of 2024”, PetroNor interim CEO Jens Pace said in an earlier statement. “We are happy to have worked with our largest shareholder to conclude this transaction that will create value for all shareholders by strengthening our balance sheet to put us one step closer on our pathway to paying dividends”.
PetroNor purchased 78.57 percent of the Sinapa and Esperança licenses from Svenska Petroleum Exploration AB in 2021 and acquired the rest of the interests in 2023. The combined licenses cover an area of 1,916 square miles (4,963 square kilometers). According to company estimates, the two main prospects, Atum and Anchova, represent mean unrisked prospective resources of 467 million barrels.
Congo Asset Award
Meanwhile, the government of the Republic of Congo awarded the PNGF Bis license to a contractor group led by Perenco as an operator and PetroNor, represented through its Congolese subsidiary Hemla E&P Congo, as a partner with a net interest of 22.7 percent. The approval will clear the path for the signing of a production sharing agreement in early 2024, PetroNor said in a separate news release.
“We are pleased that the farm-out of the Guinea Bissau licenses will lead to the drilling of an important exploration well for Guinea Bissau and the region”, Pace said. “The completion of this transaction, coupled with the approval from the Congolese Council of Ministers on PNGF Bis, is a welcome way to close what has been a very successful year for PetroNor”.
The Guinea Bissau payment is a significant contribution to the company’s year-end balance sheet that is already strengthened by record production and oil sales. In addition, we look forward to progressing the development of the new license in the Congo during 2024 with our partners”, Pace added.
PetroNor is an Africa-focused independent oil and gas exploration and production company holding exploration and production assets offshore West Africa, specifically the PNGF Sud licenses in Congo Brazzaville, the A4 license in The Gambia, and OML-113 in Nigeria.
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