Petroleum Africa
Find us on: 
Thursday, April 4, 2019
Soco Internatnional completed the acquisition of Merlon Petroleum El Fayum Company from Merlon International. As previously announced, SOCO agreed to acquire Merlon in consideration for approximately $136 million in cash and the issue of 65,561,041 new SOCO ordinary shares to the seller. Prior to their issuance, the consideration shares represented 19.75%. of SOCO’s issued share capital or 16.49%. of SOCO’s issued share capital as enlarged by the consideration shares.
The consideration shares will be issued to the seller on completion with an obligation on the seller to distribute such shares to its shareholders within 30 days of completion, save in relation to up to 5.8 million shares (representing less than 1.5% of the company’s enlarged issued share capital) that the seller may retain for up to 18 months following completion.
Merlon has agreed to pay an assignment fee in respect of the transaction to Egypt’s state-run oil company, EGPC.
Production from the El Fayum concession during Q1 2019 averaged 5,692 boepd. Following completion, SOCO will be focused on offsetting the recent decline and then growing production through additional drilling and the implementation of a secondary recovery program in the core El Fayum fields.
The El Fayum fields comprise stacked reservoirs that need pressure support from water injection as a secondary recovery mechanism to optimize production. Due to investment constraints over the past few years Merlon’s work program was restricted to a single rig and limited pilot water flood initiatives. SOCO identified a clear opportunity to grow the business with a focused program of investment. This program will begin immediately with the addition of a second rig and will be further developed over the coming months. There has been no change in SOCO’s assessment of the potential of the concession.
SOCO has a technical plan and the core team to deliver on this activity which, combined with the enhanced oversight necessary to manage the expanded investment program, will provide the basis for exploiting the full potential of the El Fayum concession. The company’s goal remains to increase production from the El Fayum concession to 15,000 bpd by 2023.
" alt="Botala Increases Stake in Botswana’s Serowe CBM Project">
" alt="Petrofac Awarded Technical Services Contract by GEPetrol">
" alt="Uganda Signs its Fourth CPF with International Atomic Authority">
" alt="EcoFlow Introduces Loadshedding Technology to South Africa">
" alt="Trafigura to Commercially Deploy Daphne Technology’s Puremetrics™ on LNG Carrier">
" alt="Seatrium and Shell Inks MOU to Collaborate on Floating Production Systems">
" alt="Wildcat Updates Status in the Republic of Sudan and South Sudan">
