GUINEA BISSAU: PetroNor E&P Enters Farm-out of Exploration Licences for upto $85 million

PetroNor E&P AB, a wholly owned subsidiary of PetroNor E&P has entered into a binding agreement to farm-out 100 per cent of its participating interest in the two exploration licences offshore Guinea-Bissau to an SPV owned by Apus Energy DMCC, a subsidiary of Petromal.

According to the agreement, which has an effective date of 1 January 2023, PetroNor will receive a
payment of up to USD 85 million divided into a contribution towards past licence costs of at least USD
25 million at completion of the transaction, and a further entitlement to two contingent earnout
payments of USD 30 million each, subject to government approval of a field development plan and
achievement of continuous production respectively.

“Today’s agreement marks an important milestone for PetroNor and for Guinea-Bissau as completion
of the transaction will add significantly to PetroNor’s balance sheet and lead to the drilling of an
exploration well during the first half of 2024,” says interim CEO Jens Pace.

The agreement involves the Sinapa (Block 2) and Esperança (Blocks 4A and 5A) licences. The assets will
be assigned to Apus Energia Guiné Bissau SA, which is owned by Apus Energy DMCC, a Dubai-based
joint venture majority owned by Petromal LLC.

Petromal LLC is the largest PetroNor shareholder, with an ownership of close to 34 per cent of the
shares. Since the transaction involves a related party, the non-conflicted directors on the board have
received an independent assessment from KWC AS of the fairness of the negotiated terms, which
concludes that the transaction is fair.

“We are happy to have worked with our largest shareholder to conclude this transaction that will
create value for all shareholders by strengthening our balance sheet to put us one step closer on our
pathway to paying dividends” added Pace.

PetroNor E&P AB, which holds the Sinapa and Esperança licences was purchased from Svenska
Petroleum Exploration AB in 2021, when PetroNor assumed operatorship and an interest of 78.57 per
cent in both licences. In 2023, it was confirmed that the remaining 21.43 per cent previously held by
FAR Limited had been transferred to PetroNor.

The combined licences cover an area of 4,963 square kilometers. According to PetroNor estimates, the
two main prospects, Atum and Anchova, represent mean un-risked prospective resources of 467
MMbbl.

The signature of the agreement was witnessed by a representative of Petroguin, the national oil
company of Guinea-Bissau. The transaction is expected to be completed in the second half of 2023
pending final government approval of a licence extension, the assignment of interests and
operatorship, and satisfaction of certain other closing conditions customary for a transaction of this
kind.