Azonto Petroleum considering sale or merger
(ASX:APY LON:AZO) is considering a number of options that could see the sale or merger of the company.
This is part of an ongoing strategic review and as is customary for such announcements Azonto said there is no guarantee discussions will lead to either outcome.
At the same time it was a case of one-step forward one-step back for the company’s Gazelle offshore gas development in Cote d'Ivoire.
Good news first: the company revealed progress for the third-party power project that would become the customer for Gazelle’s gas.
CI-Energies the state-owned utility has signed a non-binding agreement with a reputable international company that may finance develop and operate the power project.
The proposed operator would also be responsible for upgrading power line infrastructure for the gas-to-power project Azonto added.
Azonto told investors that it expects the full scope and schedule for the power project will be agreed by the end of May and this is expected to coincide with the formal approval of the power project by the Ministry of Environment and Sustainable Energy (which is a due by mid-May).
For Gazelle itself however there is expected to be a delay to project sanctioning as the Vioco Petroleum joint venture company has decided to re-launch a tendering process. It comes after one contractor proposed a lump sum price for the project that was higher than expected.
Azonto said the new tender was required to achieve a “realistic” break-even gas price for the project and to capitalise on current downward pressure in the market for drilling and other construction costs.
The company also said work is ongoing for the Hippo North exploration project ahead of decision making for a potential drill programme. Vioco must commit to drilling a well before October if the project is to go ahead.
Azonto owns a 35% stake in Vioco a joint venture with Vitol and Vioco in turn owns an 87% interest in the CI-202 block that hosts Gazelle and Hippo North.
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