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(Sharecast News) - Synergia Energy has agreed to sell its remaining 50% working interest in the Cambay PSC, onshore India, to joint venture partner Selan Exploration Technology, it announced on Friday, for total consideration of $14m.
The AIM-traded firm said the deal followed a strategic review, and would mark its full exit from the field, which it partially farmed out to Selan in 2024.
Under the heads of terms agreement, Selan would pay an initial $0.5m on signing, followed by $6.5m on receiving Indian government approval for the transfer, and a final $7m 12 months later.
All payments would be subject to applicable taxes.
Selan was granted 180 days of exclusivity while the parties finalised a sale and purchase agreement, which would then require regulatory and shareholder approval under the AIM rules.
The Cambay joint venture was established in August last year following government consent, with the parties preparing to drill a new well under the agreed work programme.
However, Synergia's board had concluded that a full divestment was in shareholders' best interests, citing a valuation of the deal at about six times the company's current market capitalisation.
"Following a detailed strategic review and given the persistent gap between our net asset value and market capitalisation, the board has determined that divesting our remaining Cambay interest represents the most effective way to unlock value for shareholders," said chief executive officer Roland Wessel.
"The terms agreed with Selan reflect a compelling valuation ... and will provide the resources to return capital to shareholders while supporting the advancement of new strategic initiatives."
Synergia said the current Cambay work programme would continue during the transaction process.
Further details, including its revised strategy and plans for returning proceeds to shareholders, would be outlined in a forthcoming circular and notice of general meeting.
At 1427 BST, shares in Synergia Energy were up 57.89% at 0.03p.
Reporting by Josh White for Sharecast.com.
