REG - Reabold Resources - HoA Signed between Gunvor and LNEnergy

Reabold ResourcesAnnouncement

02/05/2024 07:00

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RNS Number : 9003M  Reabold Resources PLC  02 May 2024

2 May 2024

 

Reabold Resources plc

 

("Reabold" or the "Company")

 

Heads of Agreement Signed between Gunvor and LNEnergy

 

 

Reabold Resources plc, the investing company focussed on developing strategic
gas projects for European energy security, is pleased to announce the
execution of a non-binding Heads of Agreement ("HoA") between Gunvor
International B.V. ("Gunvor") and LNEnergy Limited ("LNEnergy") for the
purchase of liquefied natural gas ("LNG") by Gunvor from LNEnergy from the
Colle Santo gas field, located onshore Italy. LNEnergy has the exclusive right
to acquire a 90% interest in Colle Santo and Reabold owns a 26.1% equity
interest in LNEnergy.

The HoA provides the terms on which Gunvor will purchase LNG from LNEnergy at
its planned small-scale LNG production facility at the Colle Santo gas field.
Gunvor will purchase approximately 44,000 tonnes of LNG per annum. The point
of sale will be the truck loading flange at the small-scale LNG plant, and the
LNG will then be delivered by truck in Italy. The price for the LNG will be
aligned with the Italian PSV price. The contract term will be for an
indefinite period with a minimum term of five years.

The HoA also provides for a potential prepayment by Gunvor for a portion of
the first five years of deliveries, with such amounts subject to prepayment
being a total of approximately 66,000 tonnes of LNG, or 999,000 MWh. The
average forward Italian PSV gas price for the years 2025-2030 is currently
approximately €30 / MWh. The prepayment is conditional on agreeing
definitive transaction documentation and LNEnergy obtaining the required
permits to construct and operate the LNG production facility.

On the basis of the HoA, LNEnergy and Gunvor intend to negotiate a
fully-termed LNG sale and purchase agreement over the next six months. During
such time, LNEnergy will exclusively discuss the sale and purchase of LNG from
Colle Santo with Gunvor.

Further announcements will be made in due course.

About Gunvor Group

Gunvor is one of the world's largest independent commodities trading houses by
turnover, creating logistics solutions that safely and efficiently move
physical energy from where it is sourced and stored to where it is demanded
most. Gunvor has strategic investments in industrial infrastructure -
refineries, pipelines, storage and terminals - that complement our core
trading activity and generate sustainable value across the global supply chain
for our customers. The company, which in 2023 generated US$127 billion in
revenue on 177 million MT of volumes, is the leading independent global trader
of liquefied natural gas (LNG).

 

Stephen Williams, Co-CEO of Reabold commented:

 

"We are delighted with this progress towards an extremely significant
milestone for our LNG project at Colle Santo in Italy. The agreement envisages
a counterparty of the highest quality potentially providing both offtake and a
prepay, which is extremely valuable for the project in these times of capital
scarcity in the industry.

 

"In keeping with Reabold's broader strategy, Colle Santo has the potential to
provide significant, reliable and low carbon energy into the Italian market,
improving European energy security whilst contributing to an efficient energy
transition."

 

 

 

 

ENDS

 

 

For further information, contact:

 

 Reabold Resources plc                                        c/o Camarco

 Sachin Oza                                                   +44 (0) 20 3757 4980

 Stephen Williams

 Strand Hanson Limited - Nominated & Financial Adviser        +44 (0) 20 7409 3494

 James Spinney

 James Dance

 Rob Patrick

 Cavendish - Broker

 Neil McDonald                                                +44 (0) 20 7220 0500

 Pearl Kellie

 Stifel Nicolaus Europe Limited - Joint Broker                +44 (0) 20 7710 7600

 Callum Stewart

 Simon Mensley

 Ashton Clanfield

 Camarco                                                      +44 (0) 20 3757 4980

 Billy Clegg

 Rebecca Waterworth

 Sam Morris

 

Notes to Editors

 

Reabold

Reabold Resources plc has a diversified portfolio of exploration, appraisal
and development oil & gas projects. Reabold's strategy is to invest in
low-risk, near-term projects which it considers to have significant valuation
uplift potential, with a clear monetisation plan, where receipt of such
proceeds will be returned to shareholders and re-invested into further growth
projects. This strategy is illustrated by the recent sale of the undeveloped
Victory gas field to Shell, the proceeds of which are being returned to
shareholders and re-invested.

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