Business
Partial Sale of Santa Cruz Sur Assets
Partial Sale of Santa Cruz Sur Assets.
About this update from Nativo Resources Plc
[{"type":"text","content":"\n\n26 May 2023\n \n \nEcho Energy plc\n(\"Echo\" or the \"Company\")\n \nSale of a majority interest in the Santa Cruz Sur Assets, opportunity to acquire interests in a Producing Colombian Portfolio, Equity Issue at a Premium\n \nNew Conditional Gas Sales Contracts\n \n \nEcho Energy, the Latin American focused energy company, is pleased to announce that, further to the Heads of Terms announced on 9 May 2023, the Company has now signed binding transaction documents, subject to shareholder approval, on broadly the terms outlined in the Heads of Terms.\n \n\nThe Board of the Company is requesting shareholder approval for the partial sale of its Santa Cruz Sur assets on the basis that it:\n \n· Addresses the Company's near-term funding challenges by providing near term funding, enabling the Company to transfer to Buyers the significant in-country creditors which had built up during the COVID-19 period and providing access to funding for the Santa Cruz assets.\n· Provides continued exposure (both directly through the retained 5%, the contingent payments, the further 5% option and the indirect holding in the Operator) to a well-funded Santa Cruz portfolio, with the concessions likely to be extended as a result of the provision of guarantee.\n· Provides the company a new platform from which to move forward with an opportunity to drill an exploratory well on a strong Colombian portfolio with its corresponding lower risk jurisdiction and a clean balance sheet whilst still receiving cash flow from its 5% position in the producing assets of Santa Cruz Sur.\n \n\n \nTransaction Highlights\n \n- Sale and Purchase Agreement (\"SPA\") signed with Selva Maria Oil S.A. and Interoil Exploration and Production ASA (the \"Buyers\"), conditional on Echo shareholder approval, for the proposed disposal (the \"Proposed Disposal\") of 65% out of the Company's current 70% working interest in Santa Cruz Sur for a cash consideration of up to £1.725 million, consisting of:\n \n- a cash consideration of £0.825 million, with an initial cash payment of £75,000 due immediately; and\n \n- &n...