Pura Vida Energy says it is set to pay off its $4 million in debt after receiving in-principle government approval for its farm-out of its Mazagan oil and gas exploration permit off the coast of Morocco.
The approval is a key step in the approvals process for the Mazagan farm-out, and brings Pura Vida closer to receiving a cash payment of $US15 million under terms of the agreement.
Pura Vida initially announced the farm-out of a 52 per cent stake the Mazagan permit, to a subsidiary of Freeport-McMoRan oil and gas, in January this year.
The agreement will provide exploration funding up to a maximum of $US215 million, as well as an up-front cash payment of $US15 million.
Drilling at the Mazagan field will begin early next year.
Delays in obtaining the approval from the Moroccan government had weighed heavily on Pura Vida’s share price, which slipped to a low of just under 40 cents in May.
At 11:40AM, WST, Pura Vida’s stock was up 9.73 per cent at 62 cents. The company’s high mark was around 76 cents in early January.
Analysts at Hartleys have flagged a price target of $1.78 for Pura Vida stock, while GMP initiated coverage last month with a $2.60 target.
Pura Vida is also seeking a farm-in partner for its Gabon licence, and is hoping to replicate the success of its Moroccan permits.
The company said today it is receiving good interest in the Gabon licence at an early stage of the farm-in process.
