Coro finds new buyer for Italian business
London-listed Coro Energy has struck a deal to sell its non-core Italian gas operations to US-incorporated Dubai Energy Partners Inc (DEPI), as part of a shift in focus towards activities in southeast Asia.
Under the sales and purchase agreement, Coro will sell its seven gas concessions across Italy for €300,000 ($366,000), the company said in a stock exchange filing on May 27. DEPI has to pay €30,000 non-refundable deposit. The transaction needs approval from Italy's economic development ministry and will be backdated to May 26.
"We are pleased to agree a sale of our non-core Italian assets to DEPI, who are ideally placed to take the portfolio forward," CEO Mark Hood said. "The disposal allows us to prioritise our time and resources on our low carbon and renewable energy strategy in South East Asia, which continues to gain momentum."
Canadian junior Zenith Energy made a bid for Coro's Italian assets in late 2019, but withdrew the offer in light of the collapse in European gas prices as a result of the COVID-19 pandemic.
Coro booked a $2.2mn after-tax loss on its Italian business last year, generating only $0.8mn in revenues. The company said that while it believed the business could turn a profit through investment in ramping up production and extending the assets' lives, its attention is now on southeast Asia, where it bought a 15% interest in the Conrad Petroleum-operated Duyung gas field off Indonesia a year ago.
"The board believes that incremental capital expenditure on the Group's renewable energy projects and the Duyung PSC represent a more value accretive use of the group's resources and, ultimately, has a greater possibility of generating higher returns for shareholders than allocating additional capital to the development of the Italian portfolio," Coro said.
DEPI says on its website it is looking to acquire significantly undervalued oil and gas assets, taking advantage of the current slump in commodity prices. The company also has operations in Azerbaijan, the Republic of Congo and Mexico.