18th Jul 2019 12:01
(Alliance News) - Coro Energy PLC on Thursday announced amended terms to the acquisition of a stake in a production sharing contract in Indonesia.
Coro is buying a 43% in the Bulu contract, offshore the island of Java, which contains the Lengo gas field.
The original terms were announced last September, and saw Coro pay USD7.0 million in cash and then back costs of USD1.0 million. These were to be paid on closing the deal, alongside another USD4 million in shares.
Coro will now pay USD2.5 million in cash on completion, which includes the USD1.0 million in back costs. Another USD1.5 million in cash will come at the start of September 2020.
Coro will then pay USD2.5 million at the earlier of the Bulu partners agreeing a final investment decision or the start of July 2021. Lastly, it will then pay USD1.5 million at the earlier of the start of production from Bulu or the end of 2022.
The USD4 million equity part of the deal remains unaffected.
Coro Chief Executive James Menzies said: "This re-negotiation with the asset vendor extends the consideration payment schedule out to first commercial gas production and allows more time for regulatory approvals to be obtained. This both helps de-risk the investment on Coro's behalf, whilst also preserving cash in order to build the company's portfolio further.
"We look forward to both completing the acquisition in due course and concluding an agreement for the sale of Lengo gas, as the next significant milestone in taking this project forward."
Coro shares were 7.1% lower on Thursday at a price of 2.30 pence each.
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