UPL Upland Resources Limited

By Anthony O. Goriainoff

Shares in Pennpetro Energy PLC rose Wednesday after it said it has signed a head of terms agreement with Upland Resources Ltd. for a proposed farm-in in Tunisia.

Shares at 0835 GMT were up 7.50 pence, or 27%, at 35 pence.

The oil-and-gas company, which focuses on production at the Gonzales oil field in Texas, said under the agreement its subsidiary Nobel Petroleum USA Inc. will farm-in for an 80% interest and assume operatorship of the Saouaf permit area. Saouaf is held in joint venture with Tunisia's state oil company.

The company said that the current work program needs to be carried out before the permit on Saouaf expires on Dec. 23, and that extension negotiations have already been initiated.

Pennpetro said it will reimburse Upland for the 80% of its prior sunk costs in Tunisia, capped at no more than 290,000 pounds ($378,189), and which will be paid through ordinary shares in Pennpetro.

"Our timing couldn't be better given the critical burgeoning need for additional gas and blue hydrogen supplies to Europe, especially given the fact that the Saouaf permit area is situated under the existing TransMed gas pipeline feeding gas from Algeria to Italy with spare capacity," the company said.

Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com

(END) Dow Jones Newswires

March 16, 2022 05:09 ET (09:09 GMT)

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