REG - Scirocco Energy PLC - Completion of Ruvuma Divestment

Scirocco EnergyAnnouncement

16/10/2023 10:15

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RNS Number : 2331Q  Scirocco Energy PLC  16 October 2023

16 October 2023

Scirocco Energy plc

 

("Scirocco" or "the Company")

 

Completion of Ruvuma Divestment

 

Scirocco Energy plc (AIM: SCIR), the AIM investing company targeting
attractive assets within the European sustainable energy and circular economy
markets, today announces an update on the Ruvuma transaction.

 

Scirocco is pleased to announce it has completed the transaction with ARA
Petroleum Tanzania ("APT") for the divestment of its 25% non-operated interest
in the Ruvuma asset, Tanzania.

 

In accordance with the SPA, Scirocco has received the balance of completion
payment consideration of $2.54 million (equivalent to $3.0 million completion
payment less the $0.5 million advance received following signature as well as
contractual adjustments). The cash call loan facility provided by APT and used
by Scirocco to fund cash calls during the interim period has also been fully
settled by completion and Scirocco has no ongoing associated liability.

 

Following completion Scirocco will 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, Tom Reynolds, CEO of Scirocco, said:

"This is a transformative divestment for Scirocco and we are delighted to have
reached this watershed moment for the company as we complete our transition to
a business positioned to take advantage of opportunities in the growing energy
transition sector which match our strategic investment mandate.

 

I would also like to thank the representatives of the Tanzanian government who
have supported the completion process.

 

With Scirocco's exit from the significant legacy investments of what was Solo
Oil, this will broaden the appeal of our investment proposition amongst a
significantly wider pool of prospective investors, and we look forward to
forging a new profile as a focused and ambitious company, motivated to create
sustainable long-term value and contribute to net-zero targets.

 

The receipt of the initial consideration, and even more so upon receipt of the
future contingent payments, places the Company on a solid financial footing to
explore and evaluate opportunities in line with the strategic focus on the
energy, circular and vector sectors.  The Company looks forward to engaging
with shareholders regarding our next steps."

 

For further information:

 Scirocco Energy plc                               +44 (0)20 7466 5000

 Tom Reynolds, CEO

 Strand Hanson Limited, Nominated Adviser          +44 (0) 20 7409 3494

 Ritchie Balmer / James Spinney / Robert Collins
 WH Ireland Limited, Broker                        +44 (0) 207 220 1666

 Harry Ansell / Katy Mitchell
 Buchanan, Financial PR                            +44 (0)20 7466 5000

 Ben Romney / Barry Archer / George Pope

 

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