Petroleum Africa
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Friday, November 15, 2013
Ophir Energy has found a farm-in partner and entered into an agreement to sell a 20% stake in its Tanzanian blocks to Pavilion Energy, a wholly owned subsidiary of Singapore investment company Temasek. Pavilion will gain access to Ophir’s stakes in Blocks 1, 3, and 4.
The transaction, expected to be complete in Q1 2014, falls right on the heels of Ophir’s announcement that its Mzia-3 appraisal well added to the contingent resources of the Mzia discovery on Block 1. The sale of the 20% stake will lessen Ophir’s financial output moving on to the development stage of the discoveries made and the planned LNG facility in Tanzania.
Under the agreement and upon completion, Ophir will see a cash consideration of $1.250 billion with a further contingent consideration of $38 million following the final investment decision in respect of development of Blocks 1, 3 and 4, currently expected to be in 2016.
The sale is subject to regulatory, governmental and other third party approvals and approval by Ophir’s shareholders.
Ophir’s CEO, Dr Nick Cooper, commented: “We are delighted to have entered into this agreement with Pavilion Energy. Pavilion represents a positive addition to the Joint Venture as it progresses through into the development phase and is a high quality endorsement of Tanzania’s first LNG development. The sale is consistent with our strategy of adding value in the exploration and appraisal phase of the E&P cycle, monetizing that value at the appropriate time and recycling that capital into further value creating opportunities. Tanzania remains a core part of our portfolio and we will continue to invest further in the country’s growth through our exploration activities.”
Pavilion Energy’s Group CEO, Mr Seah Moon Ming, commented: “This investment in Tanzania Blocks 1, 3 and 4 is a key milestone for Pavilion Energy to build up our LNG portfolio. It supports our plan to secure long-term energy supply at competitive prices to meet the need for clean energy in Asia. This is also important for us as we work to develop an Asian LNG hub.”
Pavilion Energy’s Chairman, Tan Sri Mohd Hassan Marican, commented: “The natural gas developments in Tanzania hold tremendous potential – not just for Pavilion Energy but for Singapore and Asia. Pavilion Energy looks forward to the partnership with BG Group and Ophir Energy in realizing the LNG project. The LNG from the Tanzanian project will provide another source of supply to the Asian markets.”
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