Mergers & Acquisitions

Seplat Energy to triple in size as it proposes to acquire Mobil Producing Nigeria for $1.283 bn

ExxonMobil's East Area in Nigeria remains one of the most successful flaring reduction and valorization projects in the Niger Delta. Picture: Dockwize.

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Officialising a transaction that has been in the making for some time, Seplat Energy has announced this morning its proposed cash acquisition of Mobil Producing Nigeria (MPNU) for $1.283bn.

Seplat Energy Offshore Ltd, a subsidiary of Seplat Energy, has now entered into the Sale and Purchase Agreement to acquire the entire share capital of MPNU from Exxon Mobil Corporation. The purchase price is set at $1.283bn plus up to $300m contingent consideration, subject to lockbox, working capital and other adjustments.

While Seplat expects the transaction to close in the second half of this year, it is still subject to Ministerial Consent and regulatory approvals from the NUPRC and the Nigerian Federal Competition and Consumer Protection Commission.

Acquired assets

By acquiring MPNU, Seplat Energy takes over Exxon Mobil’s entire offshore shallow water business in Nigeria which includes assets that are very rich in natural gas and gas liquids. The acquisition would increase Seplat Energy’s production by a whooping +186% while increasing its total 2P reserves by +89%.

The total portfolio includes a 40% operating ownership of OMLs 67, 68, 70 and 104 and their associated infrastructure. Combined, the assets produced an average of 177,000 boepd gross in 2021 according to NUPRC data. OMLs 67, 68 and 70 form what is known in Nigeria as the “East Area”, where ExxonMobil has executed some of the most successful flaring reduction and valorization projects in the Niger Delta.

Such developments notably included the Oso natural gas liquids (NGL) plant commissioned in 1998, and its expansion with the NGL II project in 2008. Both projects also provide gas to the Bonny River Terminal, enabling production of key commodities such as LPG for the domestic and export markets. Last year, the Bonny River Terminal provided some 70,000 metric tonnes of LPG to the local market for instance, making it Nigeria’s second biggest source of domestic LPG supply.

On the other side, OML 104 contains the producing Yoho field. The shallow water Yoho development project came on stream in early 2003 and oil is exported via the Yoho FSO terminal.

OML 104 has significant undeveloped gas reserves and could potentially see the deployment of a floating LNG (FLNG) unit in the near future. The license for the project was awarded to local company UTM Offshore in 2021.

As part of the transaction, Seplat Energy is also acquiring all the aforementioned infrastructure, including the Qua Iboe Terminal, a 51% interest in the Bonny River Terminal and the EAP and Oso natural gas liquids recovery plant.

Financing component

Seplat Energy will fund its cash acquisition through a combination of existing cash resources and credit facilities. In addition, it is securing a new $550m senior term loan facility and a $275m junior off-take facility. The financing syndicate comprises of both Nigerian and international banks, along with commodity trading companies.

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Eni achieves first oil from Ndungu offshore Angola

Eni has announced the start of production from its Ndungu early production development project on Block 15/06 offshore Angola. The field was discovered in 2019 and is now tied-back to the Ngoma FPSO and is the third startup on the block in only seven months. The project has an expected production rate of 20,000 barrels of oil per day (bopd) and will help sustain the plateau of the Ngoma FPSO, a unit able to produce up to 100,000 bopd and commissioned back in 2014. “A further exploration and delineation campaign will be performed in the first half of 2022 with the aim to assess the full potential of the overall asset of Ndungu,” Eni said. This is the second tie-back to the N’Goma FPSO following Agogo in early 2020. Eni has been leading a successful infrastructure-led exploration strategy on Block 15/06 for a couple of years and keeps successfully putting any new discovery into production in record time by using its two FPSOs on the block, N’Goma and Olombendo. Block 15/06 is operated by Eni Angola (36.84%) along with partners Sonangol E&P (36.84%) and SSI Fifteen Ltd (26.32%). In June 2021, Sonangol officially launched its divestment process under which it notably seeks to sell up to 10% of its interest in the license. A total of 36.2m barrels were exported from Block 15/06 last year according to the Ministry of Finance, representing a daily average of almost 100,000 bopd. As of December 2020, 142.2m barrels had been produced from the West Hub (N’Goma FPSO) with remaining reserves estimated at 174m barrels, while 85.7m barrels had been produced from the East Hub (Olombendo FPSO) where remaining reserves were estimated at 159.8m barrels. In parallel to its subsea tie-back projects on the license, Eni is also advancing plans for the full development of the Agogo discovery with a third production hub. Tenders were issued in July 2021 for a project targeting a peak production of 120,000 bopd via the installation of a third FPSO unit on the block. Full details on Block 15/06 offshore Angola are available in the “Projects” section within your Hawilti+ research terminal.

OFFICIAL: co-venturers on Block 2913b confirm Venus discovery offshore Namibia

TotalEnergies, who has a 40% operated interest in block 2913b within Petroleum Exploration Licence (PEL) 56, has confirmed that it has made a major light oil discovery at the Venus-1X well. The discovery was also officially confirmed this morning by its co-venturers Impact Oil & Gas and Namibia’s state-owned oil company NAMCOR. Venus was one of the most anticipated well in the world last year and was spudded in December 2021. Rumours have been circulating for a week now that a massive discovery has been made, with a potential find of well over 1 billion barrels of oil equivalent. While no official confirmation has been given yet on the size of the discovery, Impact Oil & Gas has announced that the find contains light oil and associated gas and constitutes a world-class discovery that exceeded pre-drill expectations. ““A comprehensive coring and logging program has been completed and will enable the preparation of appraisal operations designed to assess the commerciality of this discovery,” said Kevin McLachlan, Senior Vice President Exploration at TotalEnergies.  The discovery lies in the deep-waters of the Orange Basin in southern Namibia, where Shell also announced this month an oil discovery at the Graff-1 well on PEL 39. “The Venus well was drilled to a total depth of 6,296 metres by the Maersk Voyager drillship, and encountered a high-quality, light oil-bearing sandstone reservoir of Lower Cretaceous age, with 84 metres of net oil pay,” Impact Oil & Gas said. Block 2913b is operated by TotalEnergies EP Namibia B.V (40%) along with its partners QatarEnergy (30%), Impact Oil and Gas Namibia (20%), and Namcor (10%). Details on the block are available in the Hawilti+ research terminal.