Petroleum Africa
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Sunday, November 4, 2018
A consortium made up of Vitol, Africa Oil and Delonex are moving into Nigeria’s offshore deepwater arena, picking up stakes in major producing assets. The three have entered into a Share Purchase Agreement (SPA) to acquire a 50% interest in Petrobras Oil and Gas B.V. (POGBV) for $1.407 billion. BTG Pactual E&P B.V. will continue to own the remaining 50% of POGBV.
The transaction is subject to customary conditions precedent. The primary assets of POGBV are an indirect 8% interest in OML 127, which contains the producing Agbami field, operated by affiliates of Chevron, and an indirect 16% interest in OML 130, operated by affiliates of Total, which contains the producing Akpo field and the Egina field, which is expected to commence production by the end of 2018. Current production of 368,000 bpd is anticipated to increase to over 568,000 bpd by H2 2019
The agreed base purchase price of $1.407 billion, is on a cash and debt free basis as of the effective date of 1st January 2018. A deferred payment of up to $123 million may be due to the Seller depending on the date and ultimate OML 127 tract participation in the Agbami field, which is subject to a redetermination process. The consortium’s funding required to ultimately close the transaction will be reduced by any leakage paid to the seller by POGBV, including dividends, and increased by any contributions made to POGBV by the seller during the period between the effective date and completion. POGBV has an existing reserve-based lending facility, with a syndicate of international banks and commitments of $1.245 billion, which POGBV and the consortium believe may be increased. Given the anticipated time required to complete the transaction, POGBV’s debt capacity, forecast post effective date cash flow and the structure of the transaction, Africa Oil expects to fund its share of the acquisition with cash on hand.
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