Reabold Resources PLC (AIM:RBD) shares shot up in Tuesday's trade after it announced a conditional agreement to sell its 46.2% interest in LNEnergy to Beacon Energy PLC (AIM:BCE), in return for a capped €16 million earn-out and equity in Beacon.
Reabold will retain a right to 25% of net cash flows from the Colle Santo project once in production, up to a cap of €16 million, and it will own 29% of Beacon.
The company will not, however, contribute any further funding to the Colle Santo project.
"Reabold has successfully crystallised value from the Colle Santo gas project, both through the earn-out mechanism and the receipt of Beacon shares, whilst protecting Reabold shareholders from any further funding requirement, increased development costs or dilution in the asset," co-chief executive Stephen Williams said.
He added: "We are pleased to partner with Beacon, which recognises the value of the Colle Santo project and its strategic importance in Italy in securing national gas supply."
In London, Reabold shares were up around 39% changing hands at 0.76p.