Ruvuma PSA (Divested October 2023)
Scirocco Energy has undergone a strategic shift to divest its legacy oil and gas assets to pursue attractive production and development opportunities within the European transition energy market. The Company aims to build a self-funding portfolio of renewable energy assets and to play an important role in the energy transition.
On 16 October 2023, the company successfully completed its divestment of its legacy oil and gas asset, Ruvuma located in Tanzania.
Following the Divestment of Ruvuma, Scirocco Energy holds a retained interest in the asset whereby Scirocco will be entitled to receive a series of contingent payments going forward which depend on progress on the development activity.
- US$3 million payable upon Final Investment Decision (FID) being by the parties to the Ruvuma Asset Production Sharing Agreement or the JOA as the case may be. Given the progress made on the development to date, with first gas being targeted for December 2023, Scirocco is confident of receiving this payment later in 2023.
- Up to US$8 million payable in the form of a 25% net revenue share from the point when Ruvuma commences delivery of gas to the gas buyer. These payments will be made following the sale of gas has commenced and based on the current development timeline are estimated to commence in Q1 2024.
- Contingent consideration of US$2 million payable on gross production reaching a level equal to or greater than 50 Bcf. This will require consistent production over a period of time from the licence and is unlikely to be payable before 2025 at the earliest.
The completion of this transaction serves as a platform for the Company to pursue its growth strategy in a low-risk, growing market.