Crown Energy has entered into an agreement under which it will dispose of (or grant pre-emption rights over) its upstream oil and gas assets, excluding licensed operations in South Africa for consideration of up to US$450 million before deduction of transaction costs

Crown Energy has entered into an agreement dated 20 October 2021 under which the purchaser has the right to acquire (or pre-empt any sale of) Crown's upstream oil and gas assets (except for operations in South Africa, where the Company has an existing partnership agreement). Under the terms of the Agreement, the purchaser under the Agreement the Buyer has the right to acquire (and/or is granted rights applicable in the event of Crown Energy's disposal) of the Company's upstream oil and gas assets, including all associated claims and excluding licensed operations in relation to Block 2B in South Africa. Any such acquisition will be effected through the acquisition of the entire issued share capital of the relevant subsidiary entities.

The total consideration amounts to US$450 million before deduction of transaction costs. Under the terms of the Agreement the Buyer will pay to the Company within 5 Business Days an initial consideration of US$75 million, which has been paid by way of non-refundable advance payment for the acquisition and/or the grant of rights in respect of the relevant oil & gas assets.

In addition to the Initial Consideration, the Buyer is obliged to pay an additional US$8 million to the Company on each 6 month anniversary of signing the Agreement with a final payment of US$33 million on the 5 year anniversary, up to an aggregate of US$105 million. The Additional Consideration is also paid by way of non-refundable advance payment.

Following the acquisition of the initial subsidiary entity, the Buyer shall also pay up to US$270 million in earn-out consideration during the earn out period in case certain milestones are achieved.

Any acquisition of a subsidiary entity will be subject to regulatory approval and customary closing conditions. It is expected that completion of the first acquisition contemplated shall occur prior to 20 October 2026.

Pierre-Emmanuel Weil, Chairman of the Board, commented: 
"We are very proud today. This transaction shows Crown Energy's ability to create significant value from its assets and to create a bright future".

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