Scirocco Energy PLC (AIM:SCIR) is looking forward to potentially faster payment of the contingent payments included in the divestment of its Tanzanian assets.

The company is currently awaiting the completion of the initial transaction, with the upfront US$3mln payment anticipated in the second quarter of 2023.

A further US$13mln of contingent payments are built into the transaction tied to progress in the field, and according to the latest update from the project, those payments could be triggered sooner than Scirocco originally anticipated.

"As we progress towards completion of the divestment of Scirocco's interest in Ruvuma to APT, the likely acceleration of first gas revenue - which could be seen as early as Q4 2023 - is a very positive step towards receiving the contingent payments relating to FID and the deferred consideration linked to a share of gas revenue,” Scirocco chief executive Tom Reynolds said in a statement.

The Ruvuma joint venture group led by Omani group ARA Petroleum Tanzania (APT) is now targeting first gas from the licence in October this year.

APT plans to conduct test production in March and is advancing talks to conclude a gas sales agreement with the Tanzanian authorities, with a view to delivering gas from the Ntorya field into Madimba gas plant in October.

At the same time, a “near final” version of a field development plan has now been submitted to the Tanzanian state oil and gas company for final comments.

Under the sales agreement between Scirocco and APT, agreed in August 2022, the AIM-quoted firm is due a further US$3mln payment from APT upon final investment decision, and up to US$8mln of further payments will be due via a 25% net revenue share once gas deliveries begin to the gas buyer, while a final US$2mln payment comes due once total volumes reach or exceed 50bn cubic feet of gas.  By Jamie Ashcroft, Proactive