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Panoro Energy in agreement to purchase some of Tullow Oil's West Africa assets

Sat, 20 Feb 2021 Source: thebusiness24.com.gh

Panoro Energy ASA is an independent E&P company listed on the Oslo Stock Exchange and based in London.

They have exploration and production assets in Africa with oil production from fields in Tunisia, Gabon and Nigeria.

On the 9th February, 2021, Tullow Oil signed two separate sale and purchase agreement for some of its nonoperated offshore oil fields in Equatorial Guinea (The EG Transaction) and the Dussafu assets in Gabon (The Dussafu Transaction), with Panoro Energy.

This agreement is a strategic business decision to enable both companies execute their respective business growth plan.

Tullow Oil has keen interest in Ghana and boost immensely of the flagship fields it operates in the West African Country.

The move will help reduce Tullow’s debt pile of about US$2.4 billion, which is about four times its current market cap of US$577million.

An initial amount of US$140 million will be paid with an option of US$40 million, which will be tied to oil prices and the performance of the acquired assets.

Tullow is already discussing with its lenders to restructure its debt to narrow its focus to the operating fields in Ghana. Is this a move to push for more exploration activities in Ghana because of the high quality of crude.

Panoro plans to finance with a US$70 million private equity placement and $90 million in debt underwritten by commodities trader Trafigura.

The marketing of the oil obtained from these acquired fields will be done by Trafigura.

The deal covers a 14.25% stake in Block G offshore Equatorial Guinea and 10% in Gabon’s Dussafu Marin Permit, in which Panoro already has some presence.

For Panoro, this deal adds 6,900bbl/d to their net production, which is quadrupling to their current production.

This projected production numbers will enable Panoro to start paying dividends in 2023.

According to the CEO of Panoro, John Hamilton, the company will continue to look at acquisition opportunities of this sort in the future.

During an interview with Reuters, Panoro CEO said, “There are a number of companies, including the oil majors, who are busy looking to rationalize their portfolios in some of these countries and we do see growth opportunities in these areas,”

Source: thebusiness24.com.gh
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