Petroneft agrees €61m 'farm-out' deal
Russia focused, Irish-based Petroneft has agreed an $85m (€61.5m) binding "farm-out" deal for its most important oil exploration licence.
Petroneft's share price closed up more than 10pc on the news at 7.5c, following the statement.
The deal with Oil India includes $35m in cash upfront that will enable the company to repay its debts to Macquarie and Arawak and have cash to finance developing the Licence 61, which it owns and operates in Tomsk Oblast in the Russian Federation.
The oil and gas explorer will execute a binding legal agreement to farm out the licences within the next week, in exchange for a 50pc stake, the company said in a statement yesterday.
The company has been under pressure from biggest shareholder Natlata Partners in recent weeks, including over the previous failure to nail down a deal.
"We note the announcement of the long-awaited farm-out deal by PetroNeft. We will study the terms and comment once we have done that," a spokesman for Natlata owner Maxim Korobov said.