Shares of Scirocco Energy PLC (LON: SCIR) rallied 6.45% after revealing that the operator for its Ruvuma joint venture project had awarded the contract for seismic mapping for the Chikumbi-1 well at a significant discount.
Investors cheered the fact that the contract was awarded to Africa Geophysical Services Limited (“AGS”) by the project’s operator ARA Petroleum Tanzania Limited (“APT”) at a discounted lumpsum price that was lower than the project’s initial budget.
The Ruvuma project is a joint venture operation between Scirocco Energy and Aminex Plc. It saw both firms update their respective investors regarding the contract award, which was their shares rise.
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The project’s primary goal is to understand the full potential of the Ruvuma joint venture and will serve as the basis of any future development plans.
The seismic data acquisition will target approximately 338 square kilometres, with the process kicking off in October. The process will run into the rainy season, at which point AGS could take a break.
The project will resume after the rainy season and be completed without the two companies incurring additional costs.
Tom Reynolds, Scirocco Energy’s CEO, commented: “Operator APT has made excellent progress to secure highly competitive seismic acquisition rates, delivering a considerable cost saving to the joint venture. The project is now gathering momentum towards developing a proven gas resource into the established Tanzanian gas market.”
Scirocco Energy share price.
Scirocco Energy shares rallied 6.45% to trade at 0.99p, rising from Thursday’s closing price of 0.93p.