Sonoro Energy to Buy 20% Stake in UAE’s MENACo
Canadian oil and gas company Sonoro Energy Ltd has announced that it has entered into a non-binding Memorandum of Understanding (MoU) to acquire, directly or indirectly through a subsidiary, a 20% stake in the UAE-based MENACo, which is engaged in providing well management and engineering, procurement and construction (EPC) services in the MENA region.
As per the terms of the MoU, Sonoro intends to acquire 20% of the issued capital of MENACo from its shareholders, in exchange for an aggregate 40 million common shares in the capital of Sonoro at a deemed value of $0.12 per share.
A definitive agreement for the proposed transaction will provide for the transaction to be subject to all applicable TSX Venture Exchange, regulatory and shareholder approvals.
MENACo is a party to a master service agreement with a national oil company providing for oil and gas well management and EPC Services. This agreement has an initial term of 5 years in respect of existing oil and gas fields currently producing over several hundred thousand barrels of oil per day (BPD) and, among other things, its purposes is to support the state entity in achieving its objective of increasing area production by over 100,000 BPD.
The parties are pursuing this objective through well re-activation/workover/re-entry of shut-in/suspended wells, EPC projects for the replacement/improvement of associated facilities and infrastructure, and sub-surface and reservoir optimisation studies, operational enhancement, maintenance and training of local personnel and other ancillary support activities.
Upon completion of the transaction, it is expected that the MENACo shareholders will collectively hold 15.2% of the issued and outstanding Sonoro Shares. The Company does not expect any new insiders to be created as a result of the proposed transaction.
Will Support MENACo
Sonoro Energy CEO Richard Wadsworth said that they were excited with Sonoro’s participation in MENACo, establishing a MENA country entry position in the oil and gas sector along with key relationships with major stakeholders.
“Directly and indirectly, Sonoro intends to support MENACo with key well management personnel applying our experience in the upstream oil and gas production and development areas to further support the national oil company in reaching their objectives,” he added.
Sonoro will announce additional details regarding the Proposed Transaction when a definitive agreement is executed, which is expected to take place in Q2 of 2024, although there can be no assurance that the parties will successfully negotiate and enter into a definitive agreement, or that the proposed transaction will be consummated on the terms or timeframe currently contemplated, or at all.
