Petroleum Africa
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Monday, February 29, 2016
MX Oil has agreed terms for the sale of its investment in Nigeria’s Aje field to GEC Petroleum Development Co. (GPDC). GPDC, a Nigerian indigenous firm, currently operates two licenses offshore (OPLs 2009 and 2010) and two licenses onshore (OPLs 907 and 917), along with OML 149 in JV with ENI and Seven Energy.
Further to the announcement of February 2, under the terms of this agreement, GPDC has the right to acquire the company’s indirect investment in the Aje Field for a total consideration of $18 million. Initially up to $3.5 million will be advanced to the company in three stages, with the first payment of $2 million expected on or around March 14. These funds will be used to finance the remaining cash calls expected to be required for the investment in order to bring the underlying asset into production.
GPDC will then have the right to acquire the investment, which is most likely to be when initial oil production commences. On exercise of this acquisition right, the Company will receive one payment of $5.75 million and then a second payment of $5.75 million six months later. The balance of $3 million will then be paid in three annual US$1 million instalments from the date of the exercise of the acquisition right, although these payments may be accelerated in the event that the oil price exceeds $45 per barrel for a three month period.
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