Primorus Investments plc (LON:PRIM) advanced in Monday’s early deals as its investee company SOA Energy landed a farm-out deal with Israel energy group Delek Drilling which is investing up to US$8.3mln.
Delek Drilling, which is rumoured to be considering a London IPO, will cover up to US$6.5mln of the expected cost of an appraisal well and production test in SOA’s Ofek and Yahel licences in addition to US$1.8mln for back costs.
In return, Delek will receive a 25% non-operated stake in the licences – leaving SOA with 45% of each.
READ: Israel gas fields in spotlight as Delek reportedly mulls London spin-out
Primorus highlighted that the Delek deal enables an appraisal well at Ofek this summer, and, the programme can be expected to take around 40 days following the spud and a further 40 days of testing thereafter – thus setting up an active and potentially significant period for SOA.
“As an early investor in SOA we are now well placed to benefit from the farm-in and any uplift in the value of our investment resulting from delineating commercial hydrocarbon reserves and resources," said Alastair Clayton, Primorus executive director.
"This is a key unlock moment for our investment in SOA and we should be able to get a clear read on the uplift in value of our investment as SOA move to undertake a UK IPO in 2019 should the upcoming appraisal drilling work at Ofek prove to be positive."
Primorus holds 14,977 shares in SOA, purchased at £6.67 per share (an investment of around £100,000) back in 2017.
In London, Primorus shares rose 4.55% to change hands at 0.12p – earlier they traded at 0.13p, representing an 18% move.