Phoenix Global Resources PLC Proposed Non-core Assets Sale (4638Q)
21 Octubre 2019 - 01:00AM
UK Regulatory
TIDMPGR
RNS Number : 4638Q
Phoenix Global Resources PLC
21 October 2019
21 October 2019
Phoenix Global Resources plc
("Phoenix" or the "Company")
Proposed Non-core Assets Sale
Phoenix Global Resources (AIM: PGR; BCBA: PGR), the upstream oil
and gas company offering its investors direct exposure to
Argentina's Vaca Muerta shale formation and other unconventional
resources, announces the proposed sale of a non-core asset.
Petrolera El Trebol SA, a wholly owned subsidiary of the Company
has entered into an agreement with Echo Energy plc ("Echo") to sell
its 70 per cent. non-operated working interest in the Santa Cruz
Sur package of five mature production blocks (the "Santa Cruz Sur
Assets").
The Santa Cruz Sur Assets are located in the Austral Basin, in
the Santa Cruz province in southern Argentina.
This transaction represents the sale of a non-core asset, in
line with the Company's strategy to restructure Phoenix's
portfolio, to focus the Company's resources on the development of
its significant unconventional oil and gas portfolio.
Asset Description
-- The Santa Cruz Sur Assets have a net current production of
approximately 2,507 boepd (1,967 boepd of gas and 540 bpd of oil)
net production to a 70 per cent. interest;
-- In the H1 2019 unaudited accounts, the Santa Cruz Sur Assets
(70 per cent.) generated a netback of approximately US$1.3 million
and an EBITDAX of US$0.7 million;
-- 1P reserves of 4.3 mmboe and 2P reserves of 13.7 mmboe (net
to a 70 per cent. interest) as at 31 December 2018; and
-- The Santa Cruz Assets are carried at an historical book value
of approximately US$41 million in the H1 2019 financial statements;
the disposal will release cash resources that will be redeployed in
the development of our unconventional assets, which the Board
believes will realise greater value for shareholders.
Sale Consideration
The initial consideration for the sale is US$7 million in cash
plus applicable local taxes and a further US$1.5 million, which
will be satisfied by the issue of 39,724,576 new ordinary shares of
Echo (the "Consideration Shares"), at a price of 2.95 pence per
ordinary share being the 20 day volume weighted average price prior
to the date of this announcement.
Phoenix has agreed to a three-month lock-in in respect of 100%
of the Consideration Shares and a further three-month lock-in in
respect of 50 per cent. of the Consideration Shares.
The Sale agreement provides for further contingent deferred cash
consideration of US$1.5 million, subject to an increase in the
proven reserves attributable to the Santa Cruz Sur Assets as
derived from a relevant competent person's report, compared to a
2018 competent person's report.
Echo has also agreed to reimburse 60% of the cost, up to a
maximum of US$1.1 million, of the Campo Limite well on one of the
Santa Cruz Assets, which is due to be spudded during Q4 2019;
US$500,000 in cash and the balance in ordinary shares of Echo.
This transaction is subject to certain conditions being
satisfied including the waiver of right of first refusal and
tag-along rights by ROCH SA, the minority partner in the Santa Cruz
Sur Assets, which must be fulfilled within 14 days. If these
conditions are not satisfied the transaction will terminate.
Completion must take place within 30 business days or the agreement
will also terminate.
For further information, please contact:
Phoenix Global Resources plc Kevin Dennehy, CFO T: +54 11 5258 7500
Shore Capital Antonio Bossi T: +44 20 7408 4090
Joint broker and nominated David Coaten
adviser
Panmure Gordon Charles Lesser T: +44 20 7886 2500
Joint broker
Camarco Billy Clegg T: +44 20 3757 4980
Financial PR Owen Roberts
James Crothers
About Phoenix
Phoenix Global Resources is an independent oil and gas
exploration and production company focused on Argentina and listed
on both the London Stock Exchange (AIM: PGR) and the Buenos Aires
Stock Exchange (BCBA: PGR). The Company has over 1.8 million
licenced working interest acres in Argentina (of which over 0.7
million are operated), 57.1 million boe of working interest 2P
reserves and average working interest production of 10,249 boepd in
2018. Phoenix has signi cant exposure to the unconventional
opportunity in Argentina through its approximately 700,000 working
interest acres with Vaca Muerta and other unconventional
potential.
The Company's website is www.phoenixglobalresources.com
- ENDS -
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END
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