TIDMSCIR
RNS Number : 6540R
Scirocco Energy PLC
02 March 2023
2 March 2023
Scirocco Energy plc
("Scirocco Energy" or "the Company")
Ruvuma Operational Update
Scirocco Energy (AIM: SCIR), the AIM investing company targeting
attractive assets within the European sustainable energy and
circular economy markets, notes the update issued today by Aminex
PLC regarding the Ruvuma asset (link below), in which Scirocco
awaits completion of the divestment of its 25% interest to ARA
Petroleum Tanzania ("APT"):
https://www.investegate.co.uk/aminex-plc--aex-/rns/strategy-company-ops-update/202303020700035799R/
Key highlights that relate to SCIR's ongoing divestment process
are as follows:
-- The Ruvuma [joint venture group] is now targeting first gas from the licence in October 2023
-- A two-week well-testing programme on the Ntorya-2 well
("NT-2") has been designed and scheduled for late March 2023,
utilising a mobile testing unit, to provide additional information
required for the design of in-field processing facilities and the
export pipeline; in particular, an accurate measurement of the gas
composition.
-- Advanced negotiations regarding a Gas Sales Agreement ("GSA")
in respect of the Ntorya Gas Field are ongoing with the Tanzania
Petroleum Development Corporation ("TPDC"). It is expected that the
GSA will be agreed and finalised shortly.
-- Tanzanian Authorities have actively engaged in substantial
discussions with potential contractors for an export pipeline from
Ntorya to the Madimba Gas Plant to accommodate gas by October
2023.
-- APT has held significant discussions with potential contractors for the construction of field processing/gathering facilities.
-- A near final Field Development Plan ("FDP") has been
submitted and is now with TPDC for final comments, which, upon
approval, will lead to the issuance of a Development Licence for
the Ntorya Area.
-- A well-workover of the Ntorya-1 well ("NT-1"), to enable
rapid tie-in to the gas production facilities and bring the well
into early production requires the use of a drilling rig and will
run after the drilling of CH-1, expected later this year
The successful conclusion to the above workstreams is expected
to have the following impact on the project:
-- The decoupling of the spudding of CH-1 from first gas
production and receipt of gas revenues. APT continues discussions
with rig contractors and is confident of rig availability.
-- Accelerated production from Ntorya, strongly supported by the
Tanzanian authorities, and which has now been brought forward twice
from the original schedule.
-- The FDP and resulting Development Licence will be granted up
to 18 months ahead of the original schedule.
Ruvuma Transaction
As communicated in the RNS of 31 August 2022, Scirocco has
agreed to the sale of its 25% interest in the Ruvuma asset to APT.
The total consideration of up to US$16 million comprised of:
-- Initial consideration of US$3 million payable on completion
of the disposal, which is now expected to be in Q2 2023;
-- US$3 million payable upon final investment decision ("FID")
being taken by the parties to the Ruvuma Production Sharing
Agreement or the JOA as the case may be;
-- Deferred consideration of 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;
-- Contingent consideration of US$2 million payable on gross
production reaching a level equal to or greater than 50Bcf.
Commenting on the update, Tom Reynolds, CEO of Scirocco,
said:
"As we progress towards completion of the divestment of
Scirocco's interest in Ruvuma to APT, the likely acceleration of
first gas revenue - which could be seen as early as Q4 2023 - is a
very positive step towards receiving the contingent payments
relating to FID and the deferred consideration linked to a share of
gas revenue.
The earlier than expected release of payments to Scirocco would
provide capital for reinvestment into EAG and other prospective
target assets within the deal pipeline presently being assessed.
With regards to ongoing capex on the Ruvuma project, Scirocco's
exposure to these costs is covered by the loan facility agreed with
APT. We continue to make progress towards completion although it is
possible that this may slip into Q2 2023 rather than the previously
guided timeframe of Q1 2023. We will provide an update in due
course."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation No. 596/2014, which forms part of
United Kingdom domestic law by virtue of the European (Withdrawal)
Act 2018.
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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