On October 24, 2019, Panoro Energy signed an agreement to sell its interest in block OML 113 in Nigeria to PetroNor for USD 10 million in PetroNor shares and 25 million in contingent payments based on future gas production volumes.
On December 5, 2019, PetroNor announced that it has finalized and entered into the separate investment and shareholders agreement with the OML 113 operator, Yinka Folawiyo Petroleum (YFP). The purpose of the YFP agreement is to form a partnership and a jointly owned special purpose vehicle named Aje Petroleum to focus on the revitalization and development of OML 113 and the Aje oil and gas field, offshore Nigeria.
The agreement sets out the contribution by YFP and YFP Deep Water of their shareholding in the companies holding the YFP and YFP DW participating and economic interest in OML 113 to the partnership and the SPV. Similarly, PetroNor will contribute its shareholding in companies holding its participating and economic interest in OML 113, which is being acquired from Panoro Energy. Following completion, Aje Petroleum will hold a 75.5% participating interest and an average economic interest in the order of 38.7% in OML 113, with an initial 29% economic interest at the onset of the transaction. Additional details on licence interests are provided in the attached appendix.
The ownership of Aje Petroleum is to be shared between YFP and PetroNor on the basis of a 55% and 45% shareholding respectively. Governance is established via a board consisting of five directors (the “Aje Board”) with two nominated by each of YFP and PetroNor and one independent director. One of YFP’s nominated directors will be the Chairman.
YFP, as the operator of OML 113, will engage Aje Petroleum as a technical service company. A joint project management team will be established by the Aje Board and be led by a member nominated by PetroNor. An early deliverable will be the agreement of a workplan and budget in relation to the operations of OML 113. The completion of the YFP Agreement is subject to authorization of the Nigerian Department of Petroleum Resources and consent of the Minister of Petroleum Resources.