Re-Launch of Italian Portfolio

RNS Number : 7750D

Coro Energy PLC

07 March 2022

 

7 March 2022

Coro Energy Plc

("Coro" or the "Company")

Re-launch of Italian Portfolio

Coro Energy Plc, the South East Asian energy company focused on leading the regional transition to a low carbon economy, provides an update on the re-launch of the Company's Italian portfolio following the termination of the previously agreed sale process.

Highlights:

· Italian gas prices have now reached circa €1.55 per scm, a 700% rise over the last 12 months.

· The Company now expects to generate in excess of €5 million per annum free cash flow from its Italian portfolio once Sillaro is brought back into production, expected in March 2022.

· Following termination of the conditional sale and purchase agreement between the Company and Dubai Energy Partners Inc ("DEPI") for the disposal of the Company's Italian portfolio (the "SPA") and, in light of the new economic outlook for the business, the Company has terminated the previously agreed sale process and will not be marketing the Italian portfolio for sale.

· Cash flows from the Italian portfolio will support Coro's South East Asian growth strategy.

As previously announced on 28 February 2022, the Company had entered into a 5 business day, good faith consultation period with DEPI , an international oil and gas company focused on the acquisition of undervalued producing assets, in respect of the SPA. That consultation period concluded without the parties having agreed a means by which the SPA may proceed to completion.  Accordingly, Coro has now terminated the SPA.

While the Company's strategic focus remains pursuing energy transition opportunities in South East Asia, the recent increase in gas prices in Europe and beyond provides a compelling case to re-launch the Italian portfolio to provide a strong financial platform for the Company which has the ability to generate cash flows for deployment by the Company into energy transition opportunities in South East Asia.

The Board and Coro's executive team, having completed a full review of the Italian assets, have agreed that to maximise shareholder value, the assets will no longer be marketed for sale and will instead be managed for value and cash flow.

Italian Portfolio Overview

· Gas producing portfolio in Italy with six production concessions.

· Current production from Rapagnano of c.6k scm/d.

· Sillaro, once back in production which is expected in March 2022, will add a further c.18k scm/d initially.

· The Board expects the Italian portfolio to generate in excess of €5 million of free cash flow in the next 12 months (assuming €1 per scm).

· Current geo-political conditions have seen gas prices in excess of €1.50 per scm

· As Europe transitions to a low carbon economy, gas is expected to play a vital transitional role and gas prices are projected to remain strong for the foreseeable future.

· Various low risk operations are expected to be carried out in the course of 2022 to further boost production, including a potential producing zone reperforation at Rapagnano, recompletion of Casa Tiberi (providing access to a lower horizon) and the initiation of development activities at the Sant' Alberto concession.  Sant' Alberto is an existing 55 Bcf discovery which historically successfully tested above 75k scm/d.

The Company will also take the opportunity to establish and fund out of cash flows, an independent Italian abandonment fund, which over time will cover future Italian abandonment liabilities.

CEO Mark Hood commented:

"I am delighted to report that recent market changes have provided a clear opportunity for the re-spawning of our Italian portfolio with a view to providing solid near-term cash flows to support our South East Asian growth strategy."

For further information please contact:

Coro Energy plc Mark Hood, Chief Executive Officer	Via Vigo Consulting Ltd
Cenkos Securities plc (Nominated Adviser) Ben Jeynes Katy Birkin	Tel: [phone]
Vigo Consulting Ltd (IR/PR Advisor) Patrick d'Ancona Chris McMahon	Tel: [phone]
WH Ireland (Broker) Harry Ansell Katy Mitchell	Tel: [phone]

This announcement contains inside information

Scm means standard cubic metres of gas; scm/d means standard cubic metres of gas per day; and Bcf means billion standard cubic feet of gas.

 

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