18th Nov 2024 17:00
(Alliance News) - Corcel PLC on Monday said it has entered into a deal to buy into a gas field in Brazil.
The Angola and Brazil focused energy company said its subsidiary CRCL Brazil Ltd has entered a binding option agreement with Petroborn Oleo & Gas SA to acquire Petroborn's IRAI gas field.
The agreement gives Corcel the option to acquire 20% interest in the IRAI gas field and right-of-first refusal for the remaining 80%. It also grants first refusal over an adjacent site known as IRAI Opportunity.
The IRAI gas field, located near Salvador in Brazil, has been in production since 2018. One of its three wells is currently online, producing 117 barrels of oil equivalent per day.
The site's other two wells are shut-in pending workover operations. As part of its acquisition, Corcel must provide Petroborn with a loan of approximately USD550,000 in the first-quarter in order to complete two workovers.
"If the option is not exercised, the loan will be repaid in full," Corcel added.
Should it choose to exercise the option, Corcel will then advance a "capped" USD3.0 million "for additional development activities over a two-year period".
"The first tranche of USD850,000 will fund one development well in the first half of 2025. A follow-on funding H1 2026 of USD2.1 million will support further development through mid-2026," it added.
Corcel shares closed down 0.5% at 0.20 pence each on Monday in London.
By Holly Munks, Alliance News reporter
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