REG - Synergia Energy Ltd - Finalisation of Cambay Field Farm Out and JV

Synergia EnergyAnnouncement

14/02/2024 14:30

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RNS Number : 1679D  Synergia Energy Ltd  14 February 2024

RNS Announcement

 

14 February 2024

 

AIM: SYN

Finalisation of Cambay Field Farm Out and Joint Venture

 

Further to its announcement of 12 February 2024, Synergia Energy Limited
("Synergia" or the "Company") is pleased to announce the successful conclusion
of negotiations with Selan Exploration Technology Limited ("Selan") and
execution of a farm-out agreement regarding the Company's Cambay Field
Production Sharing Contract ("Cambay PSC").

 

Highlights

 

·    The Company has agreed to farm out 50% of the 100% interest held by
the Synergia Group in the Cambay PSC to Selan

·    Selan, is an Indian oil and gas operator listed on the Bombay Stock
Exchange and the National Stock Exchange of India. Selan has currently entered
into a scheme of amalgamation with Antelopus Energy Private Limited, another
highly respected Indian oil and gas operator, which is currently awaiting
regulatory approvals

·    Synergia and Selan will be joint operators of the Cambay PSC with
Selan to be appointed as Lead Joint Operator

·    Both Synergia and Selan are focussed on developing the Cambay PSC
Eocene gas and gas condensate reservoir which contains independently certified
2P gas reserves of 206 BCF (as at 1 June 2022)

·    The joint venture unlocks the path to a full field development of the
Cambay PSC with a sophisticated and experienced operator-partner

·    The farm-out and associated joint operating agreement are conditional
upon customary consents from the Government of India ("GoI") for the transfer
of the 50% interest to Selan and Selan assuming a Lead Joint Operator role
("GoI Approval").

·    Synergia and Selan have agreed the form of joint operating agreement
for the Cambay PSC and will enter into the joint operating agreement upon
receipt of GoI Approval

 

Summary of the transaction

 

·    In exchange for the 50% interest, Synergia will be carried by Selan
through an agreed US$20 million work programme ("WP") comprising 3 new wells
focussed on the Eocene reservoir and 3 well work-overs

·    The WP is to be completed within 18 months of the later of GoI
approval of the WP or the award of contracts for the WP, extendable by a
further six months in certain circumstances

·    Synergia will receive a cash payment of US$2.5 million immediately
following GoI Approval. The Company proposes to apply the proceeds of this
cash payment towards working capital purposes.

·    Synergia will retain a 50% interest in the Cambay PSC and a 50% share
of the future production and revenues.

·    Synergia will be entitled to bonuses of up to US$ 9 million, linked
to future cumulative gas sales thresholds being achieved as follows:

o  US$0.5 million, if cumulative gross gas sales from the Cambay PSC exceeds
5 Bcf;

o  US$1.0 million, if cumulative gross gas sales from the Cambay PSC exceeds
10 Bcf;

o  US$1.5 million, if cumulative gross gas sales from the Cambay PSC exceeds
15 Bcf;

o  US$2 million, if cumulative gross gas sales from the Cambay PSC exceeds 35
Bcf; and

o  US$4 million, if cumulative gross gas sales from the Cambay PSC exceeds 70
Bcf.

·    Selan has the option to participate in the Cambay CCS scheme on terms
to be agreed

·    The farm-out agreement contains warranties given by the Company to
Selan in relation to, amongst other things, title to the Cambay PSC, as well
as certain limited indemnities.  The agreement is governed by Indian law.

 

AIM Rule 12 Schedule Four Disclosure

 

As at 30 June 2023, Synergia recorded its interest in the Cambay PSC at a book
value of c. A$17.6 million. For the year ended 30 June 2023, the Company
recorded c. A$1.3m in revenue from the Cambay PSC, and a loss from operations,
including exploration expenditure, from the asset of c. A$1.9m. All figures
reported on a 100% interest basis.

 

 

Roland Wessel, CEO of Synergia Energy Limited, commented

 

"The farm out and joint venture with Selan marks a significant event for the
Company insofar as it will facilitate the path to a full-field development of
the substantial Cambay field reserves. Selan is a high quality operator whose
experienced management team have an intimate knowledge of the Cambay Basin and
Indian oil and gas operations. We look forward to a collaborative and dynamic
partnership with Selan who share the Company's values regarding providing
shareholder returns through production growth and operational and financial
efficiency".

 

 

The information contained within this announcement is deemed by the Company to
contain inside information as stipulated under the Market Abuse Regulation
(EU) 596/2014 as it forms part of UK domestic law by virtue of the European
Union (Withdrawal) Act 2018 ("UK MAR").

 

 

For and on behalf of Synergia Energy Limited

Roland Wessel

CEO

 

 

 

 

For further information, please contact:

 Investor Enquires           AIM Joint Broker                            AIM Joint Broker               AIM Nominated Adviser          Media Enquires (UK)

 Synergia Energy Ltd         Panmure Gordon (UK) Ltd                     Novum Securities               Strand Hanson Limited          Vigo Consulting

 Briana Stayt                Broker                                      Broker                         Nominated Adviser              Investor Relations

 Investor Relations          Mark Murphy / Hugh Rich / Freddie Wooding   Colin Rowbury                  Ritchie Balmer / Rory Murphy   Patrick d'Ancona / Finlay Thomson

 Email:                      Tel: +44 (0)20 7886 2500                    Email:                         Tel: +44 20 7409 3494          Email:

 bstayt@synergiaenergy.com   UK                                          crowbury@novumsecurities.com   UK                             patrick.dancona@vigoconsulting.com

 Tel: +61 8 9485 3200                                                    Tel: +44 20 7399 9427                                         finlay.thomson@vigoconsulting.com

 Australia                                                               UK                                                            Tel:+ 44 20 7390 0230

                                                                                                                                       UK

 

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