UK oil & gas firm bolsters its position by taking sole ownership of Tunisian business

London-based independent E&P company Panoro Energy has entered into a definitive agreement with Beender Tunisia Petroleum Limited (Beender) to acquire its 40 per cent shareholding in Sfax Petroleum Corporation (SPC) for a total consideration of approximately $18.2 million in a mix of cash and shares.

According to the company, SPC – through its subsidiaries – indirectly owns a 49 per cent interest in the producing TPS assets which comprise five oil field concessions in the region of the city of Sfax, onshore and offshore shallow water Tunisia, and an 87.5 per cent interest in the Sfax Offshore Exploration Permit (SOEP) offshore Tunisia.

John Hamilton, CEO of Panoro, commented: “This is a compelling and accretive transaction for Panoro that is aligned with our growth strategy. The acquisition materially increases our interest in the producing TPS assets, where we have built a deep understanding through our role as joint operator alongside the Tunisian national oil company ETAP since 2018, and the prospective Sfax Offshore Exploration Permit.

“The TPS assets are long-life, low-cost oil fields with a stable production history and significant volumes of oil yet to be recovered while the Sfax Offshore Exploration Permit holds three oil discoveries and numerous identified prospects and leads in the vicinity of existing infrastructure. Beender have been a highly valued minority partner for several years and we now welcome them as Panoro shareholders.”

While Panoro’s effective ownership of SPC prior to the acquisition stood at 60 per cent – 29.4 per cent interest in the TPS assets and 52.5 per cent interest in SOEP – following the acquisition, the UK firm’s ownership of SPC will increase to 100 per cent – 49 per cent interest in the TPS assets and 87.5 per cent interest in SOEP – with SPC becoming a fully owned subsidiary of Panoro.

Julien Balkany, Chairman of Panoro, remarked: “We are very pleased to complete this complementary acquisition of almost 3 million barrels of oil of 2P reserves and net daily production of 800-900 bopd. We welcome the opportunity to expand our position in Tunisia and to increase our net exposure to our TPS existing producing assets with minimal additional G&A costs.

“The attractive purchase price means this value driven acquisition shall be immediately accretive and is consistent with Panoro’s strategic vision whilst remaining fully committed to maintain our current shareholder returns policy.”

The TPS assets comprise five oil field concessions – Cercina, Cercina Sud, Rhemoura, El Ain/Gremda and El Hajeb/Guebiba – in the region of the city of Sfax, onshore and shallow water offshore Tunisia. These oil fields were discovered in the 1980s and early 1990s and have produced over 60 million barrels of oil to date. Panoro highlights that the current production is stable at rates in excess of 4,000 barrels of oil per day.

While approximately 50 wells were drilled in the TPS fields to date, some of these wells have been abandoned, and 12 remain on production with seven wells currently shut-in awaiting workovers or reactivation. Three wells are used for the disposal of produced water.

The production facilities consist of various wellhead installations, connected via intra-field pipelines to processing, storage and transportation systems. The crude is transported to a storage and export terminal about 70 km south of the assets at La Skhira. The gross production at the TPS assets averaged 4,232 bopd in 2022 and Panoro says that it sees opportunities to restore production to historic levels of 6,000 bopd gross.

On the other hand, the SOEP, containing the Ras El Besh Concession, lies in the prolific oil and gas Cretaceous and Eocene carbonate platforms of the Pelagian Basin offshore Tunisia. Panoro emphasises that numerous existing producing fields with infrastructure and spare capacity in pipelines and facilities are in the vicinity of the permit area.

There are three oil discoveries in the permit – Salloum, Ras El Besh, and Jawahra – with gross recoverable oil estimated to be approximately 20 million barrels. In addition to these discoveries, Panoro points out that there is “considerable exploration potential” within the permit, with gross unrisked prospective resources estimated to be around 250 million barrels.

Panoro has actively pursued the expansion of its asset portfolio and to this end, the UK player got more acreage offshore Equatorial Guinea, following the award of a stake and operatorship in Block EG-01.