TIDMCRCL
RNS Number : 4802A
Corcel PLC
24 May 2023
Corcel PLC
("Corcel" or the "Company")
Oil Acquisition in Angola - Vendor Equity Subscription - TVR
24 May 2023
Corcel Plc (London AIM: CRCL), the extractive industries
exploration and development company, with interests across battery
metals and oil and gas, announces that it has signed its first oil
and gas acquisition with the purchase of a 90% interest in Atlas
Petroleum Exploration Worldwide Limited ("APEX"), that has working
interests in several historically producing oil assets in the
Kwanza Basin, onshore Angola.
Highlights
o Entry into onshore Angola through the acquisition of a 90%
interest in APEX - owner of working interests of between 20% and
35% in 3 onshore blocks containing two historically producing
oilfields for re-development and one exploration licence
o Initiates the Company's pan-Angola/Brazil strategy
capitalising on both the resource opportunities as well as the
historic ties and shared geology and language between the two
countries
o Brownfield re-development potential on 2 existing fields
(Tobias and Galinda) of 85 MMbls P50 gross unrisked remaining
contingent oil resources (APEX estimates), 15.98 MMbls net to
Corcel
o Additional exploration potential of 1,460 MMbls gross unrisked
P50 prospective oil resources post-salt/pre-salt (APEX estimates),
297.1 MMbls net to Corcel
o Consideration for the acquisition is GBP800,000 satisfied
through the issuance of 200,000,000 new ordinary shares at a price
of GBP0.004, locked up for 18 months
o Simultaneous investment in Corcel of GBP282,741 by APEX
shareholders and investors from the oil & gas sector in Brazil
and Angola, resulting in the issuance of 70,685,250 new ordinary
shares at a price of GBP0.004
o Combination of the recent Mt. Weld partial sale proceeds and
the vendor placing ensures project is fully funded for the licence
acquisition phase
o Mr Scott Gilbert, a vendor, joining the Board as a
Non-Executive subject to regulatory checks - Mr Gilbert brings a
long track record as an executive and investor in the oil and gas
sector internationally, including Angola and Brazil
Corcel Executive Chairman, James Parsons, commented:
"I am delighted to announce this first acquisition in our oil
and gas strategy, providing a strong initial platform on which to
progress our pan-Angola/Brazil growth strategy. The metrics on this
acquisition are compelling for Corcel shareholders and the window
is now open for rapid further consolidation onshore Angola
alongside new asset acquisitions in Brazil. I look forward to being
in Angola later this week with our partners for the licence
signature and award ceremonies.
The Kwanza basin has been producing for 35 years, is a well
understood petroleum system and has both significant scale and
upside. Corcel sees significant opportunities to increase the
legacy operator estimated resources given the structural
configuration of the basin and recent new structural mapping. We
also see large stratigraphic and structural pre salt structures on
blocks, analogous to the offshore Cameia discovery. Our initial
focus will however be on quickly securing first oil and revenues
through our redevelopment opportunities."
Transaction Summary:
Corcel has acquired a 90% interest in APEX, a privately owned
company domiciled in the BVI, for GBP800,000 settled via the
issuance of 200,000,000 new ordinary shares, priced at GBP0.004 per
share (the "Consideration Shares"). The Consideration Shares are
locked up for 18 months post issuance. Existing APEX shareholders
will retain a 10% interest in the company and will be carried by
Corcel through first oil on the KON-11, KON-12 and KON-16
blocks.
Completion of the transaction is contingent upon the formal
execution of three Risk Service Contracts ("RSCs") covering the KON
11/12/16 blocks, with the Angolan government, expected later this
week. The terms of the RSCs include an initial exploration phase of
5 years, with a subsequent exploration phase of 2 years and a base
production period of 20 years. The minimum spend on the blocks are
US$6m on KON-11 and KON-12 and US$3m on KON-16, with commitments to
drill one well on all three blocks. As part of the transaction, the
vendors have agreed to provide any guarantees should they be
required by government. Further announcements on completion will be
made as appropriate.
Consistent with APEX's obligation with the Angolan government to
develop the capabilities of and strengthen local exploration and
production companies, the Company has also signed an agreement with
a local exploration and production company to buy this entity out
of an internal consortium agreement with APEX, whereby they would
otherwise have had entitlement to 25% of the APEX position in these
three licenses, and would also have entitlement to certain cash
payments. This buy-out agreement involves Corcel issuing 28,240,839
new ordinary shares (the "Buy-Out Shares") and paying US$225,000
cash expected to be utilized towards the local exploration and
production company's operations. The shares will be locked in for
18 months.
APEX Portfolio Overview:
The APEX portfolio is located onshore Angola, and consists of
interests in three licences:
o KON - 11 Non-Operated - 12 historical wells (20% working
interest - 18% net to CRCL)
o KON - 12 Non-Operated - 8 historical wells (25% working
interest - 22.5% net to CRCL)
o KON - 16 Operated - 1 historical well (35% working interest -
31.5% net to CRCL)
KON-11 and KON-12 are considered brownfield development
opportunities and include the historically producing Tobias and
Galinda fields, both drilled and developed in the 1960s and 1970s
by Petrofina, with combined historic production over 30 MMbbls.
Both licences are operated by Sonangol (the Angolan national oil
company).
APEX's total reported unproduced contingent oil resources are
estimated at:
o KON-11 - 65 MMbbls, 11.7 MMbls net to CRCL
o KON-12 - 19 MMbbls, 4.28 MMbls net to CRCL
All three blocks have significant post and pre-salt prospective
resources, both stratigraphic and structural with APEX estimating
Prospective Resources of:
o Post-salt 456 MMbbls - unrisked P50 (138 MMbo risked), 81.1
MMbls net to CRCL
o Pre-salt 1,029 MMbbls - unrisked P50 (223 MMbo risked), 215.9
MMbls net to CRCL
Both the Tobias (KON-11) and Galinda (KON-12) fields were
discovered and originally developed in the 1960s. Both reservoirs
are in the Binga limestone with 4-14% porosity and located at 700m
and 1,900m respectively. Peak production at Tobias was
approximately 17,500 bbls/d and at Galinda was approximately 2,700
bbls/d. Historic total production, which started in 1960 and ceased
in the early '80s, was 29MMbbls and 2.8MMbbls respectively. APEX
and Corcel believe that significant recoverable volumes of oil
remain in place at both locations and initial plans may include
additional seismic work to firm up drill locations, as well as a
combination of vertical and horizontal wells. The development plan
envisioned for KON-11/12/16 qualify for marginal field fiscal
terms, as outlined by the Angolan government, resulting in
advantageous royalty, tax and depreciation regimes.
The Company estimates an initial funding requirement below US$1M
to secure the three RSCs which includes US$800k of pre-negotiated
signature bonuses. The Company is fully funded, post the recent
partial sale of Mt Weld and the vendor placing, for this
requirement.
APEX has net assets of approximately $15,000 and did not trade
in the year ended 30 September 2022.
The Company also notes recent announcements by TotalEnergies to
develop the offshore component of the Kwanza basin .
The Company plans to re-launch its investor presentation shortly
and hold an investor event to more fully explain to shareholders
the forward work programme.
Vendor Subscription:
The Company further announces the completion of a fundraising of
GBP282,741 ("the Placing") through the issuance of 70,685,250 new
ordinary shares of a nominal value of GBP0.0001 priced at GBP0.004
per share ("Placing Shares") subscribed for by the vendors of APEX
and several Brazilian and Angolan oil and gas investors.
The Company has agreed on the following staged settlement
timeline with the investors.
o GBP201,958 representing 50,489,500 shares to be settled on 31
May 2023 ("Tranche 1")
o GBP25,000 representing 6,250,000 shares to be settled on 30
June 2023 ("Tranche 2")
o GBP25,000 representing 6,250,000 shares to be settled on 31
July 2023 ("Tranche 3")
o GBP30,783 representing 7,695,750 shares to be settled on 31
August 2023 ("Tranche 4")
New Director Appointment and Executive Appointment:
Mr Scott Gilbert, one of the vendors, will join the Board as
Non-Executive, subject to regulatory checks. Mr Gilbert brings a
long track record in oil and gas sector with significant experience
in Angola and Brazil. In addition, a Luanda based ex-Chevron oil
and gas professional, and one of the vendors, will also join the
Company as Chief Commercial Officer and MD Angola.
As previously announced on 20 February 2023 the Company is also
in the process of reviewing its executive staffing model and Board
to reflect the recent strategic broadening to oil and gas and will
make further announcements in this regard in due course.
Total Voting Rights:
Application has now been made for the Consideration Shares, the
Buy-Out Shares and Tranche 1 of the Placing Shares, resulting in
278,730,339 new ordinary shares to be admitted to trading on AIM
and it is expected that their admission to AIM will take place on
or around 02 June 2023 ("Admission").
Following Admission, the Company's total issued share capital
will consist of 1,220,091,631 Ordinary Shares, with one voting
right per share. The Company does not hold any shares in treasury.
Therefore, the total number of Ordinary Shares and voting rights in
the Company will be 1,220,091,631 from Admission. This figure may
be used by shareholders in the Company from admission as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company pursuant to the FCA's
Disclosure Guidance and Transparency Rules.
Further updates will be provided on Total Voting Rights on
completion of Tranches 2, 3 and 4 of the Placing.
Qualified Persons Statement:
Leonardo Salvadori, a Geologist with over 35 years of relevant
experience in the oil industry and member of the Society of
Petroleum Engineers. has reviewed this announcement for the
purposes of the current Guidance Note for Mining, Oil and Gas
Companies issued by the London Stock Exchange in June 2009.
For further information, please contact:
Scott Kaintz Corcel Plc CEO
020 7747 9960
James Joyce / James Bavister /Andrew de Andrade WH Ireland Ltd NOMAD & Broker
0207 220 1666
Patrick d'Ancona Vigo Communications IR
0207 3900 230
Estimates of contingent resources presented in this RNS have
been prepared in accordance with the Petroleum Resources Management
System (PRMS) issued in June 2018 by the Society of Petroleum
Engineers, the World Petroleum Council, the American Association of
Petroleum Geologists, the Society of Petroleum Evaluation
Engineers, the Society of Exploration Geophysicists (SEG), the
Society of Petrophysicists and Well Log Analysts (SPWLA) and the
European Association of Geoscientists & Engineers (EAGE).
Estimates of contingent resources should be regarded only as
estimates that may change as future production history and
additional information become available. Not only are such reserves
and contingent resources estimates based on that information, which
is currently available, but such estimates are also subject to the
uncertainties inherent in the application of judgmental factors in
interpreting such information.
Glossary:
P50 : With respect to resources categorization, the most
realistic assessment of recoverable quantities if only a single
result were reported. If probabilistic methods are used, there
should be at least a 50% probability (P50) that the quantities
actually recovered will equal or exceed the best estimate.
Prospective resources : Those quantities of petroleum estimated,
as of a given date, to be potentially recoverable from undiscovered
accumulations by application of future development projects.
Recoverable resources : Those quantities of hydrocarbons that
are estimated to be producible by the project from either
discovered or undiscovered accumulations.
Risk : The probability of loss or failure. Risk is not
synonymous with uncertainty. Risk is generally associated with the
negative outcome, the term "chance" is preferred for general usage
to describe the probability of a discrete event occurring.
Risked / Unrisked : Those quantities of hydrocarbons on which
the Risk of failure has been applied (Risked) or not applied
(Unrisked)
Pre-salt : Stratigraphic sequence underlaying the "Massive Salt"
formation of Aptian age, where the deeper hydrocarbon prospective
resources are present
Post-salt: Stratigraphic sequence overlaying the "Massive Salt"
formation of Aptian age, where the shallower hydrocarbon
prospective and contingent resources are present
Structural trap: Type of geological trap that forms as a result
of changes in the structure of the subsurface, due to tectonic,
diapiric, gravitational and compactional processes.
Stratigraphic trap: Type of geological trap where the geometry
allowing the accumulation of hydrocarbons is of sedimentary origin
and has not undergone any post-depositional deformation.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
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END
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