Scirocco Energy PLC Corporate Update (5790A)
25 Mayo 2023 - 01:00AM
UK Regulatory
TIDMSCIR
RNS Number : 5790A
Scirocco Energy PLC
25 May 2023
25 May 2023
Scirocco Energy plc
("Scirocco" or the "Company")
Corporate Update
Scirocco Energy (AIM: SCIR), the AIM investing company targeting
attractive assets within the European sustainable energy and
circular economy markets, provides the following update on the
divestment of the Ruvuma asset, alongside an update regarding its
EAG Joint Venture.
Ruvuma Asset Divestment
Scirocco and ARA Petroleum Tanzania (APT) have executed
amendments to extend the longstop date of the proposed transaction
from 30 June 2023 to 31 August 2023. Although Scirocco has
continued to make progress with the Tanzanian Revenue Authority
("TRA") regarding obtaining tax clearance for the divestment of
Ruvuma, Scirocco and its counterparty agreed it was prudent to
extend the longstop date given this process is taking longer than
expected. Based on dialogue with local authorities to date, the
Board is confident of achieving completion of the divestment within
this extended timeline, though Shareholders should be aware, as
previously announced, that completion cannot be guaranteed.
Ruvuma Asset Recent Developments
As previously disclosed by Scirocco, the operator, APT, is
continuing to engage with Tanzanian authorities to finalise gas
sales arrangements and the award of the development licence for
Ruvuma. This has the potential to accelerate an earlier development
of commercial gas sales from Ruvuma than initially envisaged by
Scirocco which would trigger earlier pay out of the contingent
elements of consideration under the asset sale arrangements.
In addition to the expected gross completion proceeds of $2.5
million, the accelerated development process has the potential to
trigger the FID contingent payment of $3 million within Q3 of 2023
as the JV moves ahead with the programme, if approved.
EAG Investment Update
Operational and financial performance at Greenan Generation
Limited ("GGL") remains on a positive trend, and Scirocco looks
forward to providing a detailed update following the end of Q2. The
delay to the Ruvuma transaction has unfortunately undermined
Scirocco's ability to support further acquisitions with EAG at the
current time. As a result, the previously announced planned
acquisition opportunity for an anaerobic digestion plant in
Southwest England will not proceed at this time, though may be
resurrected.
To ensure funding for future acquisition opportunities, and as
previously disclosed by Scirocco, the Company has agreed that EAG
should be able to explore alternative investment sources that can
be accessed alongside or in addition to Scirocco's own
investment.
EAG continues to screen a number of opportunities within its
business development pipeline.
Commenting on the update, Tom Reynolds, CEO of Scirocco,
said:
"We're pleased to have amended the long-stop date to allow
additional time for completion of the divestment of our interest in
the Ruvuma Asset. While the process has taken longer than
originally envisaged, we are encouraged by our dialogue with the
relevant authorities in Tanzania and believe we are on track to
complete within this new timeframe.
Operational progress at Ruvuma points to the potential for an
acceleration of the contingent elements of the gross consideration
which would be transformational for Scirocco's balance sheet,
albeit not guaranteed. Until completion, cash preservation remains
a core priority for the team and we have taken proactive measures
to reduce G&A and safeguard the Company's existing cash
reserves.
As a result of the delays to completion of Ruvuma, it is
regrettable that we cannot support further acquisitions by EAG at
this time. EAG continues to assess a compelling pipeline of
opportunities consistent with its growth strategy and our
expectations of a much enhanced financial position within Scirocco
later this year provides confidence that we can support EAG to
execute value accretive deals in the second half of this year."
For further information:
Scirocco Energy plc
Tom Reynolds, CEO +44 (0) 20 7466
Doug Rycroft, COO 5000
Strand Hanson Limited, Nominated Adviser +44 (0) 20 7409
Ritchie Balmer / James Spinney / Rory Murphy 3494
WH Ireland Limited, Broker +44 (0) 207 220
Harry Ansell / Katy Mitchell 1666
Buchanan, Financial PR +44 (0) 20 7466
Ben Romney / Jon Krinks / George Pope 5000
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