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Angola: Corcel acquires 90% interest in APEX


24 May 2023

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AIM-listed Corcel, the extractive industries exploration and development company, with interests across battery metals and oil and gas, has signed its first oil and gas acquisition with the purchase of a 90% interest in Atlas Petroleum Exploration Worldwide ('APEX'), that has working interests in several historically producing oil assets in the Kwanza Basin, onshore Angola. 

Highlights

  • Entry into onshore Angola through the acquisition of a 90% interest in APEX - owner of working interests of between 20% and 35% in 3 onshore blocks containing two historically producing oilfields for re-development and one exploration licence
  • Initiates the Company's pan-Angola/Brazil strategy capitalising on both the resource opportunities as well as the historic ties and shared geology and language between the two countries
  • Brownfield re-development potential on 2 existing fields (Tobias and Galinda) of 85 MMbls P50 gross unrisked remaining contingent oil resources (APEX estimates), 15.98 MMbls net to Corcel
  • Additional exploration potential of 1,460 MMbls gross unrisked P50 prospective oil resources post-salt/pre-salt (APEX estimates), 297.1 MMbls net to Corcel
  • Consideration for the acquisition is £800,000 satisfied through the issuance of 200,000,000 new ordinary shares at a price of £0.004, locked up for 18 months
  • Simultaneous investment in Corcel of £282,741 by APEX shareholders and investors from the oil & gas sector in Brazil and Angola, resulting in the issuance of 70,685,250 new ordinary shares at a price of £0.004
  • Combination of the recent Mt. Weld partial sale proceeds and the vendor placing ensures project is fully funded for the licence acquisition phase
  • Mr Scott Gilbert, a vendor, joining the Board as a Non-Executive subject to regulatory  checks -  Mr Gilbert brings a long track record as an executive and investor in the oil and gas sector internationally, including Angola and Brazil

Corcel Executive Chairman, James Parsons, commented:

'I am delighted to announce this first acquisition in our oil and gas strategy, providing a strong initial platform on which to progress our pan-Angola/Brazil growth strategy.  The metrics on this acquisition are compelling for Corcel shareholders and the window is now open for rapid further consolidation onshore Angola alongside new asset acquisitions in Brazil.  I look forward to being in Angola later this week with our partners for the licence signature and award ceremonies.

The Kwanza basin has been producing for 35 years, is a well understood petroleum system and has both significant scale and upside.  Corcel sees significant opportunities to increase the legacy operator estimated resources given the structural configuration of the basin and recent new structural mapping.  We also see large stratigraphic and structural pre salt structures on blocks, analogous to the offshore Cameia discovery.  Our initial focus will however be on quickly securing first oil and revenues through our redevelopment opportunities.'

Transaction Summary:

Corcel has acquired a 90% interest in APEX, a privately owned company domiciled in the BVI, for £800,000 settled via the issuance of 200,000,000 new ordinary shares, priced at £0.004 per share.  The Consideration Shares are locked up for 18 months post issuance.  Existing APEX shareholders will retain a 10% interest in the company and will be carried by Corcel through first oil on the KON-11, KON-12 and KON-16 blocks.   

Completion of the transaction is contingent upon the formal execution of three Risk Service Contracts ('RSCs') covering the KON 11/12/16 blocks, with the Angolan government, expected later this week.  The terms of the RSCs include an initial exploration phase of 5 years, with a subsequent exploration phase of 2 years and a base production period of 20 years.  The minimum spend on the blocks are US$6m on KON-11 and KON-12 and US$3m on KON-16, with commitments to drill one well on all three blocks.  As part of the transaction, the vendors have agreed to provide any guarantees should they be required by government.  Further announcements on completion will be made as appropriate.    

Consistent with APEX's obligation with the Angolan government to develop the capabilities of and strengthen local exploration and production companies, the Company has also signed an agreement with a local exploration and production company to buy this entity out of an internal consortium agreement with APEX, whereby they would otherwise have had entitlement to 25% of the APEX position in these three licenses, and would also have entitlement to certain cash payments.  This buy-out agreement involves Corcel issuing 28,240,839 new ordinary shares (the "Buy-Out Shares") and paying US$225,000 cash expected to be utilized towards the local exploration and production company's operations.  The shares will be locked in for 18 months.

Click here for full announcement

Source: Corcel





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