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Thursday, December 19, 2019
Panoro Energy ASA announced that Tullow Oil Gabon S.A. has formalized its longstanding and previously disclosed 10% back-in right to the Dussafu Production Sharing Contract (PSC).
Tullow and the existing parties to the PSC (jointly, the Parties) have on December 17, entered into a deed of novation and amendment by which Tullow became party to the Dussafu joint operating agreement. Following the completion of the back-in right, the interests of the Parties in the PSC will be BW Energy (73.5%), Tullow (10%), Gabon Oil Company (9%) and Panoro (7.5%).
The exercise of the back-in right was subject to Tullow reimbursing the other Parties for its share of historic costs related to the Dussafu development. The total amount has been disputed by the Parties. However, the Parties have now reached an agreement for the undisputed share of the costs, representing a total of USD 40.9 million as at the end of October 2019. The net amount payable by Tullow to the existing partners is USD 19.8 million after adjusting for Tullow’s net lifting entitlement since the commencement of oil production in September 2018 and some surplus cash-calls made on their behalf. The net amount payable to Panoro is $1.7 million.
Negotiations are ongoing to resolve the disputed costs, which amount to an additional $18.7 million. If an agreement is not reached, the dispute will be submitted to a simplified arbitration. Panoro’s share of disputed costs is 8.333%.
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