WFW advises Coro Energy on Italian oil & gas portfolio sale9 December 2019

Watson Farley & Williams (“WFW”) has advised AIM-traded Coro Energy Plc (“Coro Energy”) on its agreement to sell its Italian oil & gas portfolio to Zenith Energy Ltd (“Zenith”). Completion of the sale is conditional on, inter alia, the approval of Coro Energy’s shareholders and the Italian Ministry of Economic Development.

The initial consideration, payable by Zenith on completion, will be settled through the issue of 6.7m new Zenith shares. Subject to the portfolio achieving average daily production of 100,000 scm over four successive months, a deferred consideration payment will be made by Zenith through the issue of new shares at an effective issue price equal to a 40% premium to its then prevailing share price.

The sale follows confirmation by Coro Energy that Coro was firmly committed to its South East Asian growth strategy and that Coro Energy had decided to prioritise the divestment of its non-core Italian operations. Coro Energy continues to execute its South East Asian growth strategy following the acquisition of a 15% interest in the Duyung Production Sharing Contract (“PSC”) in the West Natuna basin, offshore Indonesia (which contains the Mako gas field) and the successful restructuring of the cash consideration payable in connection with the Company’s first deal in Indonesia – the acquisition of a 42.5% working interest in the Bulu PSC (which contains the Lengo gas field offshore East Java).

Zenith is an international oil and gas production group headquartered in Canada and listed on the TSX Venture Exchange, the Standard segment of the Main Market of the London Stock Exchange and the Merkur Market of the Oslo Børs.

The WFW London corporate team advising Coro Energy was led by Partner and Global Mining & Commodities Sector Head Jan Mellmann, assisted by Senior Associate Jenny Hodges, Associate Clementine Freeth and Trainee Tamara Ristic. WFW Italy Head Eugenio Tranchino and Counsel Luca Sfrecola assisted on the Italian law corporate aspects of the transaction, while tax advice was provided by Partner Tom Jarvis and Senior Associate David Jacob in London.

Jan commented: “I am delighted that WFW has once again assisted Coro Energy in relation to its Italian oil and gas portfolio sale through our offices in London and Italy. That they chose to do so demonstrates once again WFW’s standing as leading law firm for complex, multi-jurisdictional energy deals”.

Coro CFO Andrew Dennan added: “Jan and his team have helped us to conclude another successful transaction. Their familiarity with our Italian oil & gas portfolio, combined with their M&A and capital markets expertise, was key to allowing us to move forward to signing on this deal within a relatively short timescale”.