Wentworth to buy Scirocco's stake in Tanzanian PSA
Wentworth Resources has struck a deal to acquire Scirocco Energy's 25% interest in the Ruvuma production-sharing agreement (PSA) in Tanzania for up to $16mn, the companies announced on June 13.
Wentworth will pay an initial $3mn when the deal is completed and a further $3mn when a final investment decision is taken on development. More payments will be made when first gas is delivered and a gross production target is reached.
The buyer will also provide Scirocco with a $6.25mn loan to cover project cash calls until the sale is concluded.
Wentworth CEO Katherine Roe said the deal would be transformational, establishing the company as a "dual-asset, full-cycle E&P with a significantly enhanced resource base and production profile."
"The deal represents an attractively priced, low risk entry into a high growth opportunity which cements our position as a leading supplier of domestic gas to Tanzania," Roe said.
The transaction allows Scirocco "to crystalise firm value from the asset which can be deployed into compelling opportunities in line with the company's strategy to focus on opportunities within sustainable energy and the circular economy," Scirocco CEO Tom Reynolds said.
Ruvuma PSA is operated by ARA Petroleum with a 50% interest, while a further 25% is held by Animex. ARA plans to drill the Chikumbi-1 appraisal well at Ruvuma in late 2022 or early 2023. First gas is expected in late 2024, and output is set to reach 140mn m3/day. This gas will be exported via a planned 30-km pipeline to the Madimba facility, which already takes supplies from the Mnazi Bay project that Wentworth already participates in.