Coro Energy, the Southeast Asian focused upstream oil and gas company, has announced that the Group has entered into a conditional sale and purchase agreement (the 'SPA') with Zenith Energy for the proposed disposal by Coro of its entire Italian Portfolio for a total consideration of £3.9 million.
The Disposal follows confirmation by the Company, in its H1 2019 interim results published on 12 September 2019, that Coro was firmly committed to its South East Asian growth strategy and that the Coro Board had, at that time decided to prioritise the divestment of the Group's non-core Italian operations.
The initial £0.4 million consideration for the Disposal, payable by Zenith to the Group on Completion, will be settled through the issue of 6.7 million new Zenith Shares at an effective issue price of 6.0 pence per Zenith Share. Subject to the Italian Portfolio being disposed of achieving average daily production of 100,000 scm over a period of four successive months, a deferred consideration payment of £3.5 million will be made by Zenith to the Group through the issue of new Zenith Shares at an effective issue price equal to a 40% premium to the then prevailing Zenith share price at the time of issue.
Completion of the Disposal is conditional on, inter alia, the passing of the Resolution at the General Meeting and the approval of the Italian Ministry of Economic Development.
James Menzies, Coro's Chief Executive Officer, commented:
'As the Company continues to focus on the investment opportunities in South East Asia, the disposal of our Italian portfolio removes non-core assets and streamlines our geographic focus. The Italian portfolio requires significant management time and capital expenditure to sustain its production and in-line with our stated strategy, we believe that focusing our resources on the rapidly growing South East Asian market will provide greater opportunity to maximise shareholder value.'
According to the Zenith Energy announcement, Coro Energy's Italian portfolio consists of 100% working interests in four producing natural gas concessions: Sillaro, Rapagnano, Casa Tiberi and Bezzecca, as well as one production concession which is development ready, S. Alberto. Two exploration concessions, Laura and Santa Maria Goretti complete the portfolio.
Click here for Zenith Energy announcement: Acquisition of Coro Energy Italian Assets
Source: Coro Energy