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.
Corcel PLC
("Corcel"
or the "Company")
Brazilian Gas Production
Acquisition - Option Agreement
18 November
2024
Corcel Plc
(London AIM: CRCL), the pan Angola-Brazil
focused energy company, is pleased to announce that its
wholly-owned subsidiary, CRCL Brazil Ltd, has entered into a
binding option agreement (the "Option") with Petroborn Óleo e Gás
S.A. ("Petroborn") to acquire i) a 20% interest in the IRAI gas
field, ii) a Right-of-First Refusal ("ROFR") over the remaining
80%, and iii) another ROFR for 100% of the adjacent TUC-T-172
exploration block ("IRAI Opportunity"), located in the state of
Bahia, onshore Brazil.
Highlights:
· Option represents
the first step in Corcel's Brazilian onshore acquisition strategy,
diversifying investor risk, bringing initial production, and
generating cashflow with minimal dilution to
shareholders
· IRAI gas field,
in production since 2018, has produced 390,000 BOE (63,972,218 m³)
of gas from three wells
· One well is
currently online, producing 117 BOEPD (18,660 m³/day in October
2024), with two others shut-in pending workover
operations
· Field production
is highly profitable, with high expected netbacks and payback on
well investments within months
· Expected peak
production from the IRAI gas field full field development could
average >1,000 BOEPD
· IRAI gas is
currently sold to one of Brazil's largest gas trading company, with
significant upside potential through increased offtake
volumes
· Corcel will fund
two workover operations on the shut-in wells, expected to begin in
Q1 2025, targeting to boost production to an average of 188 BOEPD
(30,890 m³/day) throughout 2025
· Following
workover results, the Company may elect to exercise the Option or
be repaid in full for the funding of the two workover
wells.
· Corcel will also
have a ROFR to acquire the remaining 80% interest in the IRAI gas
field and 100% of the adjacent 182km² TUC-T-172 exploration
block.
Geraldine
Geraldo, Corcel's Chief Commercial & Strategy Officer,
commented: "The IRAI Field and TUC-T-172 Option
marks an exciting entry into Brazil, demonstrating our ability to
secure value-enhancing deals in the Brazilian onshore sector to
complement our Angola exploration strategy. This positions us
perfectly to capitalise on the abundant opportunities that have
risen from the secondary market, resulting from the Petrobras
onshore divestments, paving the way for an accelerated acquisition
journey of more high-potential producing onshore oil and gas fields
in Brazil."
Transaction
Overview:
The Option requires the Company to provide a
loan of approximately US$550K to Petroborn for two workovers in Q1
2025. If the Option is not exercised, the loan will be repaid in
full.
Should the Company decide to exercise the
Option, upon doing so, the Company will advance a capped US$2.95MM
for additional development activities over a two-year period, in
two tranches. The first tranche of US$850K will fund one
development well in the first half of 2025. A follow-on funding H1
2026 of US$2.1MM will support further development through
mid-2026.
The Company will be entitled to cashflow
distributions upon funding the first tranche, expected Q1 2025,
with a temporary additional 10% interest in cashflows to accelerate
repayment of the funding. This cashflow and revenue generation from
the sale of the gas will create the possibility for providing the
investment through debt or project financing at the asset level, as
well as potential in-kind investment through the recently announced
Conterp Collaboration Agreement, thus minimising dilution to
shareholders.
Petroborn Asset
Overview:
The IRAI gas field is located in the Tucano Sul
Basin, about 110km NW of Salvador. IRAI is particularly attractive
due to the shallow nature of the gas reservoirs, with producing gas
zones ranging in depth from 220-825m across the field area. This,
combined with the relatively high gas production rates seen in the
field, with the EI-3 well peaking at >40,000m3/day (250 BOEPD)
of gas, provides the Company with a unique opportunity to
materially increase production and revenue generation at low rates
of expenditure. Gas reservoirs at IRAI are of good quality, with an
average of 13m of net pay and 23% porosity.
Figure I :
IRAI and TUC-T-172 Concession Map
The adjacent TUC-T-172 exploration block offers
additional upside potential. The structural
trend that defines the IRAI Field has been mapped by the Company to
continue into the TUC-T-172 block. The Company is evaluating the
potential of drilling a continuation of the IRAI trend in TUC-T-172
in 2026.
Corcel's
Strategy:
· High-potential
exploration well in block KON 16 (H2 2026), targeting post-salt and
pre-salt prospects, following 2D seismic campaign in
2025
· High-potential
exploration wells in blocks KON 11 and KON 12 (H2 2026), targeting
post-salt prospects, following 2D seismic campaign in
2025
· Reactivation of
Tobias (block KON 11) and Galinda oil (block KON 12); Tobias Field
re-activation in progress with ongoing engineering work on TO-13
and TO-14 wells
· Progressive
low-cost strategic acquisition of producing onshore oil and gas
fields in Brazil. Onshore Brazil remains a significant hydrocarbon
province, producing approximately 258M BOE per day.
For
further information, please contact:
Scott
Gilbert
Corcel Plc CEO &
Director
Development@Corcelplc.com
James Joyce / James Bavister / Andrew de Andrade
Zeus NOMAD &
Broker
020 3829 5000
Jonathan Wright / Rupert Holdsworth
Hunt
Auctus Advisors Joint
Broker
07711 627449
Patrick d'Ancona
Vigo Communications IR
0207 3900 230
About Corcel
Corcel has a notable oil and gas
portfolio in onshore Angola that includes brownfield redevelopment
opportunities and significant exploration upside.
Corcel's
Angola portfolio consists of interests in three
licences:
· KON
- 16 Operated - 55% working interest - 49.5% net to CRCL
· KON
- 11 Non-Operated - 20% working interest - 18% net to
CRCL
· KON
- 12 Non-Operated - 25% working interest - 22.5% net to
CRCL
Qualified Persons Statement:
Richard Lane, a Geologist with over 16 years of relevant experience in the oil and
gas industry and member of The Geological Society of London, 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.