Crown Energy provides update on Iraq asset sale and earn-out
Crown Energy provides update on Iraq asset sale and earn-out
Crown Energy AB (publ) (“Crown Energy” or the “Company”) and the purchaser are preparing for the formal completion of the Iraq asset sale. The final instalment of USD 33 million is expected to be paid on 20 October 2026, completing payment of the previously communicated fixed consideration of USD 180 million. Based on the information currently available to the Company, Crown Energy does not expect earn-out payments in the near term.
Following receipt of the final instalment, Crown Energy will be contractually entitled to request that the purchaser, a large, well-recognised and well-respected multinational oil and gas company, take over the shares in Crown Energy Iraq AB. The share transfer is expected to follow once the necessary administrative steps have been completed.
The production sharing contract (“PSC”) for the Salah ad-Din contract area in Iraq is due to expire on 28 September 2026. To the best of Crown Energy’s knowledge, the purchaser has not undertaken any activities in the contract area to date. In relation to the earn-out arrangements, the Company has not at this point been informed of any plans by the purchaser to undertake future activities in the contract area that could give rise to earn-out payments.
The agreement announced on 20 October 2021 also provides for contingent earn-out consideration of up to USD 270 million. Whilst no earn-out payments are expected in the near term, these provisions have no fixed contractual expiry date and do not terminate solely because the existing PSC expires. Qualifying activities by the purchaser within the contract area at any time in the future, including under a new or reinstated licence or agreement, may therefore trigger earn-out payments, subject to the relevant contractual milestones being achieved.
Crown Energy will announce completion of the transaction separately.