REG - Pennpetro Energy PLC - Sale and Purchase Agreement on Texas Oil Assets

Pennpetro EnergyAnnouncement

01/08/2024 08:15

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RNS Number : 7629Y  Pennpetro Energy PLC  01 August 2024

Pennpetro Energy PLC

("PPP" or "Pennpetro")

 

Pennpetro signs Sale and Purchase Agreement on Texas Oil Assets

London, 1 August, 2024 - Pennpetro Energy PLC (LSE: PPP), is pleased to advise
that it has executed the Sale and Purchase Agreement ("SPA"), with
Globalvision International U. LDA ("Globalvision") yesterday for the sale of
Pennpetro's subsidiary in Texas, Nobel Petroleum USA Inc ("Nobel") and for the
establishment of the 50/50 gas and lithium Joint Venture with Pennpetro's
Nobel Petroleum LLC

 

Pennpetro announced on the 17 July 2024, that both parties were aiming to
complete the transaction by month end. This was achieved yesterday evening
with the signing of the SPA by both parties and with the SPA dated 31-07-2024
and being signed after UK business hours.

 

Globalvision have advised that they plan to start optimisation works on the
oil wells associated with the 12.5% ORRI (referred to in more detail below) in
early August and as announced on 22 July that Houston Texas based drilling
contractor, J&J Drilling International LLC, have been engaged by
Globalvision to start in early August to work on the oil wells in Gonzales
County, Texas.  Globalvision already have people  on the ground engaged in
preparation for works to commence in coming days, this will be further
enhanced by their senior management arriving on location in the coming days.

 

On the 17 July, Pennpetro announced it had signed a very significant and
transformative Heads of Terms ("HOT") with Globalvision International U. LDA
("Globalvision"), an energy trading business based in Madeira, whereby they
would buy all of the shares in Pennpetro's subsidiary in Texas Nobel Petroleum
USA Inc ("Nobel") in exchange for a life of asset (currently estimated at
around 30 years) oil sales revenues through a 12.5% Overriding Royalty
Interest ("ORI") on the Texan oil wells  - City of Gonzales #1 well, Chalk
Talk #1 well, Chalk Talk #4 well and Whistling Straits #5 well in Gonzales and
a 10% profit share on any other wells drilled or developed within PPP's 2,036
acres in Texas.

 

In addition, Globalvision would take over all creditors that existed in Texas
leaving Pennpetro completely free of any financial obligations associated with
Texas.

 

Also, as part of the transaction, and very importantly on the lithium and gas
front, the HOT set out arrangements with Globalvision to acquire 50% of Nobel
Petroleum LLC ("NPLLC") for a 50/50 Joint Venture ("JV") where the parties
seek to assess the scope for developing gas production from the AMI with ESGY
Energy Inc ("ESGY"), and also importantly to assess the potential to produce
lithium from any well in the AMI over the life of the project term. Pennpetro
announced the ESGY transaction back in on November 2022.

 

That ESGY deal provided for Nobel selecting the Commitment Wells from ESGY's
inventory of more than 300 shallow gas prospects, further defined as those
seismic anomalies identified from a major Exxon 2-D seismic dataset in the
north Houston salt dome and adjoining counties of Texas, as well as Rapides
Parish and adjoining parishes of Louisiana. Nobel could further select an
additional twenty-eight shallow gas prospects ("Highgraded Prospects") in
which Nobel would be granted a Right of First Refusal ("ROFR") by ESGY. Upon
fulfilling its obligations by the drilling of the Commitment Wells, Nobel
would earn the Right of First Refusal ("ROFR") with respect to the Highgraded
Prospects and an additional right to participate in other like prospects,
under the same participation terms as the Commitment Wells, within the East
Texas Shallow Gas Play Area on the same terms and conditions as agreed between
the parties relative to the first thirty prospects.

 

Tom Evans, Pennpetro Energy's CEO said:

 

"The signing of the SPA with Globalvision is a tremendous step forward in this
deal for Pennpetro shareholders, it materially de-risks our involvement in
these excellent Texas oil assets and gives us significant upside on oil
production from a rich piece of Texan oil real estate. As I've mentioned
previously, the last 12 months has been a rocky and difficult ride for the
Company and with this deal, we can see massive benefits and leverage on all
future works undertaken on these oil licences for the next circa 30 years.
Given the current estimated life of the wells in the area at 20 years plus, it
potentially secures and underpins PPPs future for many years to come. With our
Over Riding Royalty Interest (ORRI) in this deal, we will rank equally with
the landowners and receive monthly revenue income from all oil sales from
Texas once production recommences. We are hopeful to see oil production and
PPP revenues starting within months."

 

"I personally will be travelling to Texas in short order to assist with the
Nobel asset handover to Globalvision and start work on our very exciting gas
and lithium JV."

 

 

-ENDS-

 

This announcement contains inside information within the meaning of Article
7(1) of (i) Regulation (EU) No 596/2014 of the European Parliament and of the
Council of 16 April 2014, as amended (the "EU Market Abuse Regulation") and
(ii) the EU Market Abuse Regulation as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018.

 

For further information visit www.pennpetroenergy.co.uk
(http://www.pennpetroenergy.co.uk) or follow us on twitter @pennpetro or
contact:

 

 Pennpetro Energy PLC:

 Tom Evans, CEO                                                                                                   tme@pennpetroenergy.com (mailto:tme@pennpetroenergy.com)

 David Lenigas, Chairman                                                                                          +44 (0) 7881825378

                                                                                                                  lenigas@monaco-capital.com

 Brokers:                                                                                                         +44 (0) 207 614 5900

 Zeus Capital

 Simon Johnson

 Peterhouse Capital Limited

 Lucy                                                                                                             +44 (0) 20 7469 0930
 Williams

                                                                                                                +44 (0) 20 7220 9797
 Duncan Vasey

                                                                                                                +44(0) 207 129 1474
 Flagstaff Strategic and Investor Communications

                                                                                                                pennpetro@flagstaffcomms.com
 Tim Thompson

 Alison Allfrey

 Anna
 Probert

 

 

 

 

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