United Oil & Gas has agreed to allow Quattro Energy more time to secure funding that will allow the companies to complete the North Sea block sale and purchase deal struck in January 2023.
United Oil & Gas in agreed on the conditional sale of the UK Central North Sea Licence P2519 containing the Maria discovery in Block 15/18 to Quattro Energy Limited ("Quattro") following the signing of a binding asset purchase agreement. According to United, Maria mid-case recoverable resources have been estimated at around six mmboe.
On April 17, the two companies said they had agreed on a one-month extension to May 17, 2023, of the long stop date in the APA to provide Quattro sufficient time to comply with conditions precedent related to the funding requirement under the asset purchase deal.
"In agreeing to this extension, it was expected that this funding process was near completion. Quattro has now informed United that this process has not completed and that they have commenced a new financing process which they estimate will now take a minimum of 2 months to complete," United Oil & Gas said Thursday.
"Following engagement with Quattro and their appointed advisor in Canada, Research Capital Corporation, the Company has agreed to grant a further extension of the long stop date to July 31, to provide sufficient time for Quattro to meet the funding requirement under the [asset purchase agreement], and has agreed that a further extension may be required for all conditions precedent to be met to allow completion of the sale, namely regulatory approvals to enable the transfer of funds to United, and the license assignment to Quattro.
"The company will continue to support and facilitate Quattro in its funding process, however, there can be no guarantee that this new process will succeed or that the sale will be completed," United Oil & Gas said.
"In considering this extension, the Company has reviewed its strategy and various options to deliver shareholder value, including potential alternative purchasers and transaction structures, with particular reference to the capital investment required to progress the license through its development. Based on this, and in line with United's strategy to actively manage its portfolio, the company continues to believe that the sale to Quattro on the current agreed terms remains the best option for United to realise value for its shareholders. A further update will be provided to the market in due course," the company said.