Good morning, everyone. This is John Hamilton, Chief Executive Officer of Panoro Energy ASA. Welcome to this morning's webcast. Yesterday, we had the pleasure of announcing a transformational transaction for Panoro, which we believe is creating one of the world's largest and leading independent African E&P companies. We're absolutely thrilled to have announced this yesterday. I'll take you through some slides that tell a little bit the story of how we think that this sets Panoro up for the future. Today, I'm joined by our Chairman, Julien Balkany, our Technical Director, Richard Morton, our Projects Director, Nigel McKim, and our CFO, Qazi Qadeer. Next slide, please. As a reminder, for those of you who haven't used the webinar before, you can ask questions by raising your hand, as shown in the left with the arrows.
You can also put in written questions into the question pane that you see down there in the bottom left. We will be taking questions at the end of the presentation. Next slide, please. I'd like to talk to you first about the transaction that we've done, and then I'll take you a little bit through the outlook of the company as well at the end before taking some questions. Next slide, please. This is a summary of the transactions we've announced yesterday. These are truly transformational acquisitions for Panoro. These were transactions negotiated at a time when oil prices were in the 40s, sometimes in the low 40s, sometimes in the mid-40s. The entire environment in which this transaction happened and the negotiations happened at a time in a very, very different oil price environment that we now fortunately find ourselves in now.
We've announced yesterday the $140 million acquisition of two assets from Tullow Oil plc. We have a 14.25% working interest in the Ceiba-Okume Complex in Equatorial Guinea and an additional 10% in Dussafu, which, for those of you who follow us will know that we already have a stake in, this more than doubles our stake in very exciting Dussafu block. These transactions were negotiated at an effective date of the first of July. Tullow Oil, for those of you who don't follow it, Tullow Oil is a very, very famous E&P company here in London. They have an over-levered balance sheet. They've had to announce a series of disposals. About eight months ago, they sold an asset in Uganda to Total, that was really kind of the beginning of this whole thing.
They needed to sell a few more assets as well to de-lever their balance sheet, and we were able to identify these two assets as things to talk to Tullow about and negotiate with them. We very much structured our deal very much along the lines of Total and Total's purchase of a Tullow asset as well, where you offer some money up front and you offer some contingent consideration as well if certain economic and technical parameters are met. That's exactly what we've done here today. The assets themselves, they're extremely high quality, we believe. They're non-operated for Panoro. They're in our core area. We're acquiring about 25 million barrels of new 2P reserves, with production which we anticipate to be around 6,900 bbl a day in 2021. There's lots of upside.
Everybody who follows us knows there's lots of upside in Dussafu, but in Equatorial Guinea, there's also significant potential. These are low operating cost assets with excellent operators. In the case of EG, these private equity-backed operators who are looking to extract every bit of oil that they can. This transaction had been financed through an equity issue, which we announced yesterday at $70 million, which was multiple times oversubscribed, we announced this morning, and a debt facility of up to $90 million. There are a number of metrics on the right here. I would simply point out that the operating cost of these assets are very low. The acquisition cost per 2P barrel or per 2P plus 2C barrel are very, very low and very attractive metrics. We have a very, very short payback on these.
If you exclude CapEx that we're going to be spending, payback is just a little over two years. If you include all the CapEx we're going to spend over the next couple of years, it's probably closer to three. We have very, very long reserve life to kind of balance that. These are long life assets. Next slide, please. We have a couple of slides which show what we think this does to Panoro when we say transformational. We have five different metrics here. One is the number of fields, the production, 2021, the 2P reserves, the 2C resources, and the operating cash flow. These are things that we've calculated based on our assumptions, the operators' assumptions, economic assumptions. As you can see, we are going to be about four times as much production this year than we would have been otherwise.
Probably three times as many 2P reserves, about eight times as much contingent resource, and close to six times the amount of operating cash flow than we would have been before these transactions. We have a situation here where the company is truly transformed and we're fully financed for all capital expenditure in Dussafu Phase One, Dussafu Phase Two, Equatorial Guinea. Everything's fully financed, ramping up to a production of 12,000 bbl a day in 2023 as Hibiscus/Ruche comes online. Next slide, please. Here are a couple of different ways of showing that same transformation. Here's what our production growth looks like over the coming years. 2021, we should be doing north of 9,000 bbl a day as a group at Panoro, including our existing assets, rising to 10 the following year, and then as Hibiscus/Ruche comes online, going up well above 12,000 bbl a day.
This really puts us into a different league than we were in before. It also puts us in a very, very nice league in terms of our larger peer group internationally, that focus on Africa. The charts in the middle, in the blue, show free cash flow in the blue bars, showing you what's happening with free cash flow after CapEx. This is after all the capital expenditure, we're still generating a huge amount of free cash flow even this year. When 2023 comes along, when Hibiscus Ruche comes online in Gabon, we really start throwing off cash flow. The blue line is our indicative year-end cash position at the end of each of those years. As you can see, we're going to start building up a material cash position.
We're going to be net cash, so all debt effectively gone on a net basis in 2023. What that does is that sets us up to be a dividend payer, a substantial dividend payer, potentially. Certainly if oil prices stay anywhere like they are now. These graphs here are shown on an assumption of $50 oil. We're currently at $60. There's even upside, a considerable upside to what I'm showing you here today. Again, this is putting us into a position where we should be able to finance all CapEx and pay dividends and pay down debt and still have money left over. Next slide, please. A little bit about the financing that we did. We announced yesterday a $70 million equity private placement, which was multiple times oversubscribed in an extremely strong response from existing shareholders.
We were able to attract a number of very high-quality new investors into the company. We're very pleased to have them on board. We financed this also with $90 million of a committed debt facility with Trafigura. This is a typical type of loan facility for oil and gas companies. What's important to note here is that there is no longer-term oil price hedging requirement as part of this loan, so we don't have to lock up the oil price, even though it perhaps is more attractive now than it was when we negotiated this loan when oil was even in the mid-40s. They were not requiring us to do material hedging. As part of this facility, we also have a $20 million working capital facility that just allows us to manage cash flows in between lifting of crude. Just managing our cash flows a bit.
They've also offered us a $50 million accordion option, if we would ever want it, if we would find another asset that we would think might be attractive. That we have significant firepower through this financing, and lots of comfort and cushion and growth within this financing as well. Next slide, please. A couple of brief words. I do have some of our technical team on the call, and maybe if there are any particularly technical questions, we can ask those in the Q&A session. I just have one slide on the Ceiba-Okume Complex because this is a new asset. For those of you who follow us will already know Dussafu quite well. This is a series of fields which were discovered already some 20 years ago. They are operated by Trident Energy, which is a Warburg Pincus-backed vehicle, ex-Perenco team.
Our partners in this are Kosmos, which are another big listed E&P company, global E&P company. Two very, very competent private equity-backed oil companies who bought these assets from Amerada Hess a few years ago, and are really seeking to exploit these assets to the best of their ability. Production in 2020 was about 34,000 bbl a day gross, but we believe there's potential to get up to about 55,000 barrels a day in 2023, and we believe that the current partners are committed to try and achieve that growth. The operating costs are very low, about $13 a barrel OpEx. Very low CapEx intensity on these. We're not going to be spending tons of money as we go along here. It's moderated. It's about 100 million barrels of gross 2P reserves left.
The real upside comes from the 3P and the 2C resources. This is a good mid-life asset where we believe that the upside largely resides in the 3P and in the 2C resources here. Again, we have highly proactive operators. These are private equity-backed operators who are really looking to make the most of this asset. We couldn't be happier to be partners as Panoro, along with such respected peers. Next slide, please. A couple summary slides. Again, there's a more extensive slide pack that was attached to the press release yesterday we made and will be loaded up onto the website shortly. I've just concentrated on a couple of the highlights and I have a couple of slides just to finish off the story here. Next slide, please.
We have an active news flow, we believe. I think it's going to be a very, very busy six months even, but beyond that, even I think you'll see that there's plenty more to come. In the next During the course of this year, we will be drilling in Gabon, the production well, DTM-07. It's the final production well of the Tortue Phase 2 project and bringing that and the DTM-06 well online. In the middle of the year, we should see a boost in production in Gabon.We'll, of course, be reporting how that goes. That project is underway. We'll also be drilling, excitingly, an exploration well in Hibiscus.
For those of you who follow us, Hibiscus was a material discovery that we made about a year and a half ago, where we took something that we thought was about 10 million barrels, it became about 44 million barrels. We now think the structure could be quite a bit bigger, and we have a well that we anticipate drilling probably as early as April, to test out that larger upside. There's truly another transformational operational activity, which is happening in about two months in Gabon, and we're very excited to have doubled down on our bet on that well. The partners are also discussing perhaps a second exploration well, perhaps in the third quarter, perhaps again into the Hibiscus structure or an alternative location being debated. We think that there's a good chance we'll even have a second exploration well in the third quarter of this year.
In Equatorial Guinea, we have a busy program with the operator, boosting production, as I noted, with three infill production wells coming in during the middle part of the year. Hopefully we'll have some press releases about the activities there and hopefully some success in boosting production in that asset. In Tunisia, we continue to pursue our workover activities we did in the past. We see that as an ongoing program and ongoing attention being paid together with our partner, ETAP, in terms of trying to maintain and boost production in Tunisia. Salloum Well, we're still pending some approvals there. That looks like it could happen perhaps in the third quarter. We also have a couple of other things happening. We have the PetroNor dividend. We have sold our Nigerian business to PetroNor E&P, another Norwegian-listed entity, who are paying us $10 million in their shares.
We intend to dividend that to our shareholders as of the record date when we announce that. That's subject to regulatory approval still, but we could have, in the second quarter, our first dividend, which will be a scrip dividend. The cash dividends, you'll have to wait another two years for. A scrip dividend coming. In South Africa, we're working together with Africa Energy to close out the approvals for the farm-in of that well in South Africa. We would hope that that's something we can drill in the second half of this year. Again, for anybody who's a shareholder of the company or thinking about becoming a shareholder of the company or just watching the company, I think you're going to see us with a very busy year. Next slide, please. This is really a summary slide. Sorry, I lost myself. There we go.
The summary slide of what we think this transaction does for us. We believe it has transformational growth, where we're immediately multiplying the size of our company by three or four times on a production reserve basis. Diversification of wells, of reservoir, of country, which can only benefit a company like ours. We hope to be moving towards being a 12,000-barrel-a-day producer. We have growth coming here. We have excellent metrics on these deals. These acquisitions are created on pretty much any metric that you can find. I challenge you to find one where it's not. A payback time is going to be very, very quick on these on the 2P basis alone. One of the very interesting things about this transaction is that actually, we're not taking on buildings and people and staff and teams. We're taking on non-operated positions here.
Panoro can maintain its relatively small corporate footprint and cost base, despite the fact that we've tripled the size of the company or quadrupled the size of the company. This is very attractive to us. We believe the assets we bought are attractive, low OpEx, low break evens, long life in our core area, and they're very complementary to each other in terms of when the cash flows come. One plus one is more than two here in terms of the way that the cash flows of these two acquisitions marry up. We believe there's upside in both of these assets we produce, both production growth and exploration opportunities, and we have the quality operators and partners to help exploit that. Finally, we really believe that we are positioning ourselves to be a very, very sustainable company in many ways, but importantly financially, where we're fully funded.
We're going to be in a position to pay dividends as soon as we possibly can and at the same time maintaining a growth story. We hope we position ourselves now to be what all E&P companies, I believe, strive to be, which is a dividend-paying, but still having a growth story to us. We believe that these transactions position us for that. That concludes my speech, I think. The next slide is just to remind you, if you would like to ask a question, you can drop a question into the question panel, or you can raise your hand, and we can try and get you verbally. My colleague, Qazi, is kindly going to field questions, and between us, we will try and answer those questions. I turn it over to you guys if you have any questions. Qazi, are you there?
Yes, John. Good morning, everyone. For those of us who would like to ask a question, please raise your hand or type in the chat box and we will acknowledge this.
I think I see one written question here, Qazi. Shall I take that one?
Yes, please. A question from Frederick Sneller, it says, "Can you say something about how and when you started negotiating with Tullow?
Sure. Well, we know Tullow extremely well in this company. They're people that we've known for many, many years. I myself have known Tullow for 20 years. Other people associated with Panoro are very familiar with Tullow. We'd obviously seen their stated disposal ambitions. They're looking to sell $1 billion worth of assets. They needed to de-lever. This is a very clear message from them. We saw the Total transaction. We really thought that we had an opportunity, we had the access, and we had the creativity to approach them back in the summer. During lockdown, we approached Tullow and started the dialogue with them around which assets we thought were ones that they could easily sell or that were readily sellable, that were attractive to us, and that made sense for Tullow perhaps to dispose.
Ones maybe where there was some CapEx coming up on or ones that structurally within their company made sense for them to sell, and other assets might have been harder to sell. We really did our homework on that and started the dialogue with them, which started with one transaction and ended up being two. I think, again, the oil price environment was quite different when we were doing this, and thankfully, the oil price has now rallied.
The reason that the companies work so well together is I think that Tullow recognized we could move fast, that we were serious people, that we had the right technical resource to evaluate these opportunities, that we had the right financial muscle, shareholder base that was supporting our growth ambitions, and that they saw that by doing two deals with us rather than one with one party and one with another party, that they could actually be extremely efficient and do this quickly. That's exactly what happened. We both, Tullow and ourselves, set out to do it that way, and very, very pleased that it's worked out that way. It's been an excellent collaboration, we think. They've done something that makes sense for their stakeholders, and we've done something that makes a lot of sense for our stakeholders.
That's kind of how it came about, and started with a small conversation, ended up being a big one. We're just very pleased that that happened. I think there's a question here, Qazi, around, is the Dussafu Hibiscus development fully funded? Is that right? I think so. Yeah. There's a question about Hibiscus Ruche development in Gabon. Well, as everybody's followed, we're producing oil in Gabon in Tortue. We have the Hibiscus and Ruche discoveries. We're calling the next phase Hibiscus Ruche, which is development of six wells over in the middle of the Dussafu block. That is something that's been well flagged. It was put on hold for a little while during COVID. That will be starting back up. We're hoping to achieve first oil there in the fourth quarter of 2022, so about a year and a half from now.
That project is starting back up again. The joint ventures purchased a jack-up rig, which will serve as a wellhead platform. Long lead items are being procured. We're drilling an exploration well in advance of that just to see whether it might change our ideas exactly about where to put the development wells when they come. The question specifically here is about, so whether we're fully funded. Yes, the whole idea behind this transaction was not just to have enough money to buy these things, was to make sure that the money and the cash flows that came from these assets would effectively be self-financing the business, which they do comfortably, even at considerably lower oil prices. The question is around our fully funded position for the next phase, two phases, frankly, of Dussafu. There's Hibiscus Phase One and probably Hibiscus Phase Two as well.
The way we see it, based on production and economic assumptions, we're comfortably financed for all of that and still be able to pay a dividend. There's a nice congratulations I see in the Thank you very much. Qazi, are there any raised hands? I think that probably concludes things. Again, on behalf of the team here, who've worked very, very hard over the past eight months. This has really taken everybody from our board, straight through every staff member we have been involved in this transaction. We worked very hard. We think this is an extremely positive transaction, extremely accretive transaction, that I think will benefit all Panoro stakeholders for many, many years. It really has set the company onto a completely different trajectory.
We will get lots of attention, I hope, in the stock market, but also just as importantly, in some ways, within the industry in which we work. We are now at a different table, in terms of our ability to be entering into other discussions in terms of our visibility within our industry. We would like to thank all of you on the phone. We'd like to thank all of the shareholders who supported us to get here, because we think it's all been worth it. These transactions really, hopefully, should be a nice catalyst for us to continue to grow. We think, again, the news flow that's going to come will catapult us even further. Unless there are any further questions, which I don't see at the moment, we'd like to thank you very much for-
Stephane. I think Stephane has his hand raised, John. Sorry.
Does he? Okay. Sorry. Okay. Stéphane, how are you?
Yes. Hi, John. Alec Aziz. Well, congratulations for today. That's great. I had a question on EG. When Trident bought the asset a few years ago, I think there were some expectations that more than just stopping the decline, they would start growing the production. For some reason, this has not happened. Why do you think it's different this time around? Related to this, what sort of influence do you have on the operator to motivate them to invest and grow production if you feel that they are not acting accordingly for whatever reason?
Okay, Stéphane. That's a really good question. Nigel, if you could maybe talk a little bit about what you've seen with Trident and Kosmos as they've taken over from Hess a couple of years ago, and where you think those priorities have been since they bought it until now, and where you think that's heading.
Certainly, John. Hello, all. Yeah, we're very encouraged by the operating partnership of Trident and Kosmos. They clearly know this asset well through their heritage. They came into the asset with a clear program of activities to turn around the performance of the asset. Their entry was at a time where certain asset management changes were required. There was a need to manage the power distribution across the facilities, to manage the water injection, to improve gas lift distribution across Ceiba wells. All of these things have been progressed over the last couple of years. Alongside that, the asset team have looked at the various opportunities for growth and upside. They've clearly ranked those. They've been chasing quick wins in the past couple of years and are now, we believe, in a position to invest on more of those upside opportunities.
The stabilization efforts for the facilities are largely in place. We now see the joint venture moving to those more significant development activities. The first part of that is this Elon drilling campaign that starts later in the year. Where a rig is now committed, the wells are planned. They're in a very good state of planning, and we expect encouraging results as a result of that operation. Beyond that, there are a series of further development activities that are visible. It's clear that it's quite a complex asset, but it's very well understood subsurface. There are very clear plans to progress the development and raise the production and deliver on the reserves and resources that we see.
Great. Thank you. With regards to the way the joint venture works, what sort of Panoro power or influence would have on the day-to-day activities? Thank you.
Well, Stéphane, I think it's fair to say that obviously we are the smallest international partner. The state-owned oil company has a stake as well, between Kosmos and Trident, they control most of the joint venture. We will have a say like any joint venture partner will, through the operating committees, the technical committees. We recognize that there's not one party that has complete voting power within it. You have Kosmos and Trident more or less equally split. There is some protection within that. We are the smaller partner, but we recognize that in this particular asset, these two companies have a lot to offer. Again, the operator, Trident, is an ex-Perenco team. They specialize in mid-life assets like this. Kosmos, who are the non-operating partner, but they're taking very much a lead in the subsurface role.
Most of the Kosmos team there are ex-Triton who Hess bought. These are people that have been actually with this asset for many, many years. You've got It's kind of like us in Dussafu. I mean, Richard has been involved in Dussafu, Richard on our phone, for 12 years now. He's probably one of the, if not the expert in the subsurface in Dussafu. You have the same kind of dynamic with Kosmos on this asset, with the ex-Triton team. We think we're in good hands. We think hopefully we can add some value along the way and participate in a proactive way through the joint venture. We're very fortunate to have the partners we do.
Fantastic. Thank you very much. Again, congratulations for this very transformational deal that takes Panoro in a completely different league, as you said. Thank you.
Thanks, Stephane. Thanks for your support. Okay, well, I think that is it. Sarah, unless you think I've missed something else?
There's a couple of other questions. I don't know if you've touched on them. There's one about elaborating a little bit on the three-year payback time.
Which seems low. Yes, these assets are extremely cash generative. It depends on how you like to look at payback. Some people look at it just on a cash flow basis. Sometimes people might like to look at it saying, "Well, okay, you're spending some CapEx over the next couple of years at Dussafu, you're spending some CapEx in E.G." We get between two and three years, depending on which of those two you pick. That's at lower oil prices as well. It just goes to show that these assets are very cash generative as they come in. Particularly E.G. is very cash generative, and doesn't have terribly much CapEx. Dussafu, again, is a couple heavier years here. It is very low, and it's an attractive deal. What can I say? In which order will the wells in Hibiscus Dussafu be drilled this year?
The first well is in April. Richard, maybe I can drop you in here. There is a question that says, "In which order will the new wells be drilled in Hibiscus this year in 2021? The first well is April. Will this be a Hibiscus appraisal well?
Thanks, John. Hello, good morning, everyone. Richard Morton here. Thanks for the question, Frederick. The plan for Hibiscus is we're going to bring the rig in. At the moment, the plan is to bring the rig in in April. It's the same rig that drilled the first batch of wells at Tortue, we know it well. It performs extremely well. The idea is we will drill the Hibiscus two well first, which is to the north of the Hibiscus discovery well. In the event of success, we'll drill one or two sidetracks. The rig will move and drill the Tortue seven well. That and the Tortue six well will be hooked up to commence production. We have another option slot on the rig, and it may come back to the Hibiscus area to drill another well in Q3, Q4 this year.
Super. Okay. Well, thanks, everybody. I think that is it. Again, thank you very much for joining. Bye-bye.