London, UK: Corcel Plc (London AIM: CRCL), the extractive industries exploration and development company, with interests across battery metals and oil and gas, has announced 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.
The acquisition is part of Corcel’s pan-Angola/Brazil growth strategy and provides a strong initial platform for further consolidation onshore Angola alongside new asset acquisitions in Brazil. The Kwanza Basin has been producing for 35 years and has both significant scale and upside potential. Corcel sees opportunities to increase the legacy operator estimated resources and to explore large pre salt structures on the blocks.
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 RSCs include an initial exploration phase of 5 years, 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.
Corcel has acquired a 90% interest in APEX for £800,000 settled via the issuance of 200,000,000 new ordinary shares, priced at £0.004 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-11/12/16 blocks.
Corcel 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 Buy-Out Shares will be locked in for 18 months.
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.”