MetalNRG PLC (LON:MNRG) has switched commodities to buy 75% of a Romanian company that owns the rights to an oil and gas concession for the next fifteen years, as well as appointing a new executive director to deliver the project.
The natural resource investor said the acquisition would involve an upfront payment and a free-carry component on the initial development capital.
MetalNRG added it is entering into the exclusivity agreement in collaboration with a London-based oil and gas investment specialist.
Pierpaolo Rocco has been hired as an executive director to lead the project, starting with due diligence, bringing with him twenty years’ experience of developing oil and gas projects for profitable outcomes.
Previously, Rocco has worked for major oilers such as Total, Eni, Shell, as well as small-caps like Subsea7, SBM, Saipem, and on projects ranging from field development to late-life extension strategies, in a variety of environments including near-shore works and deep-water developments.
The period for the new executive director and the rest of the team to carry out due diligence runs until 28 February, by which time MetalNRG hopes to have concluded the deal.
The transaction will be subject to shareholder and UK/Romanian regulatory approvals.
Rolf Gerritsen, chief executive said: “This near term cashflow generative project has the potential to add substantial value to the company alongside our Gold Ridge Project”.
Gold Ridge in Arizona is MetalNRG’s existing project and bumper high grades in samples have sent the shares soaring recently.
Today, though, they dropped 3% to 0.8p.
After the close the company revealed it had booked a pre-tax loss of £260,000 in the six months to 31 August 2019.