Petroleum Africa
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Monday, April 7, 2014
Genel Energy in partnership with White Rose Energy Ventures (WREV) have agreed to acquire 15% working interests in two pre-salt blocks offshore Angola, The two firms will be joining Statoil and Sonangol on Blocks 38 and 39 in the Kwanza Basin.
The interests will be acquired through two separate transactions. In each transaction, a 15% working interest will be acquired by a 50/50 Genel/WREV joint venture company, WRG. In Block 38, the 15% working interest will be acquired from China Sonangol for a consideration of $59 million, representing a pro rata share of past costs. In Block 39 the 15% working interest will be acquired from the operator of the block Statoil for a consideration comprising a pro rata share of past costs and a partial carry of Statoil’s share of the first exploration well. All consideration will be paid by carrying Statoil’s share of expenses on the block, with the carry of the first exploration well capped at $123 million and the remaining $99 million carry paid in the event that Genel/WREV elects to participate in additional activity on the block.
Genel intends to fund its share of the acquisition consideration and drilling cost through existing cash balances. Completion of the acquisition is subject to both Angolan government and block partner approvals.
According to Genel the acquisition gives it a position in exploration licenses that hold multi-billion barrel prospectivity and represent a relatively low risk, high impact near-term exploration opportunity. The play has already been de-risked by exploration drilling in Angola and in the directly analogous Santos and Campos Basins offshore Brazil. A working hydrocarbon system has already been established in the Kwanza Basin through discoveries made on licenses directly adjacent to Blocks 38 and 39.
The Stena Carron drillship has been contracted for a drilling program which is expected to commence in Q2 2014. The first well of this program, on Block 39, is expected to target the very material Dilolo Prospect. The first well on Block 38 is scheduled to follow the Block 39 well.
Tony Hayward chief executive of Genel said: “This transaction provides a rare opportunity to enter into a low risk, multi-billion barrel resource play. It fits with our stated strategy of securing high quality exploration opportunities targeting very material resources, and further enhances the opportunity to add significant shareholder value through the drill bit in Africa. Partnering with White Rose offers us a unique opportunity to secure a material interest in the exciting pre-salt play whilst managing our financial exposure to a level appropriate for a company of our size. White Rose brings significant directly relevant technical experience which together with Statoil, a first-class operator with longstanding regional knowledge and relationships, establishes a strong and exciting partnership with which to establish an entry position in Angola.”
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