Scirocco Energy PLC Ruvuma Transaction Update -- Tax Clearance Received (2213I)
03 Agosto 2023 - 3:45AM
UK Regulatory
TIDMSCIR
RNS Number : 2213I
Scirocco Energy PLC
03 August 2023
3 August 2023
Scirocco Energy plc
("Scirocco Energy" or "the Company")
Ruvuma Transaction Update - Tax Clearance Received
Scirocco Energy (AIM:SCIR), the AIM investing company targeting
attractive assets within the European sustainable energy and
circular economy markets, is pleased to provide an update r
egarding the Ruvuma asset, in which Scirocco awaits completion of
the divestment of its 25% interest to ARA Petroleum Tanzania
("APT") .
Announcing Significant Progress on the Completion of Ruvuma
As communicated via RNS on the 31 August 2022, the Company
entered a binding agreement with ARA Petroleum Tanzania ("APT") to
divest its 25% non-operated interest in the Ruvuma asset, Tanzania,
for a total consideration of up to US$16 million. Since then, the
transaction has gone through multiple stages of approval The
Company has now received confirmation from the Tanzania Revenue
Authority ("TRA") of the assessed tax liability of c. GBP150k,
which was in line with the Company's expectations, and which has
now been paid by the Company. The TRA issued a Tax Clearance
Certificate to Scirocco on 3(rd) August 2023 representing a major
milestone towards final completion.
Scirocco will now write to the Tanzanian Minister for Energy to
obtain the final approval of the transfer of the licence interest
to APT. On receipt of this approval, all conditions precedent to
the transaction will be satisfied and Scirocco and its counterparty
ARA Petroleum Tanzania can proceed to complete the transaction by
the amended long stop date of 31 August 2023.
At completion, Scirocco expects to receive the balance of the
completion payment of c. US$2.5 million (equivalent to $3.0 million
completion payment less the $0.5 million advance received following
signature of the agreement with APT). Following completion, as a
reminder to Shareholders, Scirocco will then be entitled to receive
a series of contingent payments which depend on progress on the
development activity of Ruvuma:
-- US$3 million payable upon Final Investment Decision (FID)
being by the parties to the Ruvuma Asset Production Sharing
Agreement or the JOA as the case may be. Given the progress made on
the development to date, with first gas being targeted for December
2023, Scirocco is confident of receiving this payment later in
2023;
-- Up to US$8 million payable in the form of a 25% net revenue
share from the point when Ruvuma commences delivery of gas to the
gas buyer. These payments will be made following the sale of gas
has commenced and based on the current development timeline are
estimated to commence in Q1 2024;
-- Contingent consideration of US$2 million payable on gross
production reaching a level equal to or greater than 50 Bcf. This
will require consistent production over a period of time from the
licence and is unlikely to be payable before 2025 at the
earliest.
Commenting on the update, Scirocco's CEO Tom Reynolds said:
'It is very encouraging to have progressed to this stage in the
transaction and we thank the representatives of the TRA and our
advisers for their diligent work throughout the process. We are now
working with our counterparty APT to deliver the final approval
from the Minister of Energy in order to complete the transaction as
soon as possible. Completion of the Ruvuma sale will mark
Scirocco's transition from an investor in cash consuming natural
resource assets to an investor in cash generative sustainable
energy assets. The expected cash payments from the sale
significantly exceed Scirocco's current market capitalisation and
the Board is confident of being able to deploy available capital
into attractive platform companies such as EAG to grow shareholder
value over time."
ENDS
For further information:
Scirocco Energy plc
Tom Reynolds, CEO +44 (0) 20 7466 5000
Strand Hanson Limited, Nominated Adviser
Ritchie Balmer / James Spinney / Robert Collins +44 (0) 20 7409 3494
WH Ireland Limited, Broker
Harry Ansell / Katy Mitchell +44 (0) 207 220 1666
Buchanan, Financial PR
Ben Romney / Barry Archer / George Pope +44 (0) 207466 5000
The information contained within this announcement is considered
to be inside information prior to its release, as defined in
Article 7 of the Market Abuse Regulation No. 596/2014, and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations .
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