Sacgasco Limited (ASX:$SGC) provides update on Philippines divestment

Sacgasco Limited (ASX:SGC) has reached an agreement with Blue Sky Resources Limited to amend the Share Purchase Agreement for the divestment of its wholly owned subsidiaries Nido Petroleum Pty Ltd and Yilgarn Petroleum Philippines Pty Ltd. The revised agreement includes improved terms and a drilling services contract with Saba Drilling Services Ltd for up to 3 wells, along with a Participation Agreement with Blue Sky regarding Service Contract 6B ('SC 6B').

Executive commentary on the revised transaction

Managing Director Kane Marshall stated, 'The revised share purchase agreement reflects significantly better terms for our Shareholders both in terms of increased firm and contingent cash components and in retaining upside exposure with our Service Contract royalties. With Nido now having signed a rig contract with Saba, Sacgasco has clear line of sight on Philippines activity and future potential value in both our contingent payments and royalties. The revised sale terms allow us to significantly reduce our liabilities on our balance sheet as well as recapitalise the Company so that we can immediately take advantage of both the material drilling opportunities we have short listed in early 2024 and activity leading into improved capital market conditions.'

Summary of the amended sale agreement and outlook

Sacgasco Limited (ASX:SGC) has successfully amended the Share Purchase Agreement with Blue Sky Resources Limited for the divestment of its Filipino entities, Nido Petroleum Pty Ltd and Yilgarn Petroleum Philippines Pty Ltd. The revised agreement includes improved terms, a drilling services contract with Saba Drilling Services Ltd for up to 3 wells, and a Participation Agreement with Blue Sky regarding Service Contract 6B ('SC 6B'). The Company anticipates a general meeting of SGC shareholders to be held in mid- to late-January 2024 to vote on the divestment. The amended sale agreement outlines the sale consideration, contingent consideration, effective date, and conditions precedent. With the divestment now having a clear path to completion, the Board is confident in the Company's capacity to satisfy the ASX's criteria. The Company is also fast tracking due diligence of near-term drilling opportunities within its existing asset portfolio and new venture opportunities. The outlook appears positive as the revised terms provide Sacgasco with the means to reduce liabilities, recapitalize, and take advantage of drilling opportunities in 2024, leading into improved capital market conditions.