Orange Basin PEL 87

Woodside Partnership

In March 2023 Pancontinental executed an Option Deed with Woodside Energy Ltd, pursuant to which Woodside fully funded a US$35 million-plus 3D seismic survey across PEL 87, completing in May 2023. Having funded the survey Woodside now has an exclusive option to acquire 56% of Pancontinental’s 75% working interest.

Woodside will have up to 180 days from the grant of a Seismic License to Woodside (by NAMCOR ) to exercise its option. If Woodside exercises the option then Woodside and Pancontinental will enter into a farmout agreement whereby Woodside will fully carry (i.e. fund) the joint venture through the drilling of the first exploration well to be drilled within PEL 87.

To ensure that Pancontinental retains a 20% interest in the project Pancontinental has, for a consideration of US$1.5 million, entered into an option agreement with Custos Investments (Pty) Ltd (Custos) to acquire a 1% interest from Custos by paying Custos a further US$1million. This option is exercisable by Pancontinental within a similar time period as Woodside’s option. Upon Woodside’s election to exercise its option, Woodside will pay Pancontinental approximately US$2.5 million, of which approximately US$1.5 million is for reimbursement of a portion of Pancontinental’s past costs.

Subsequent to the first well, if the joint venture elects to drill a second well then Pancontinental may do either of the following:

(i)  retain its 20% interest and pay its working interest share of the well;

(ii)  reduce its interest to a 10% and have Woodside carry Pancontinental through the cost of the second well; or

Also, at any time up to 60 days after the approval of any Development Plan, Pancontinental convert its interest to a 1.5% gross overriding revenue royalty interest against all hydrocarbon sales revenues from within PEL 87.