By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)- First listed Nigerian oil and gas upstream firm, Seplat Petroleum Development Company Plc said on Thursday it has concluded plans to acquire 56.25 percent stake in Belemaoil Producing Ltd, the company said in a statement.
Belemaoil a Nigerian Special Purpose Vehicle (SPV) has completed the acquisition of a 40.00 percent interest from Chevron Nigeria Limited producing OML 55.
Following this development, the Nigerian National Petroleum Corporation (NNPC) holds the remaining 60.00 percent interest in OML 55.
“The cost for SEPLAT to acquire its 22.50 percent effective working interest in OML 55 is $132.2 million. The company has also advanced certain loans of $132.9 million to the other shareholders of Belemaoil to meet their share of investments and costs associated with Belemaoil,” Seplat added.
According to the statement, consequently, the up-front cash outlay to Seplat after adjustments is $265.1 million and adjustments to the up-front acquisition cost include a deferred payment of $20.6 million contingent on oil prices averaging $90/bbl or above for 12 consecutive months over the next five years.
“Under the agreed terms Seplat will recover the loaned amounts, together with an uplift premium of $20.6 million and annual interest of 10.00 percent, from 80.00 percent of the other shareholders oil lifting entitlements,” Seplat affirmed.
The first listed Nigerian oil and gas upstream firm, estimates net recoverable hydrocarbon volumes attributable to its 22.50 percent effective working interest to be approximately 20 MMbbls of oil and condensate and 156 Bscf of gas (total 46 MMboe).
It said current gross production at OML 55 is approximately 8,000 bopd (1,800 bopd on a 22.50 percent working interest basis).
Seplat further affirmed that pursuant to the Joint Operating Model approved by Diezani Allison-Madueke, Nigerian Minister of Petroleum Resources, the company has been designated operator of OML 55. “The Company will also act as technical services provider to Belemaoil,” the statement said.
Austin Avuru, chief executive officer of Seplat was quoted as saying “The addition of OML 55 to our portfolio, together with the separately announced acquisition of OML 53, expands our footprint in the Niger Delta to six blocks and further cements our position as a leading indigenous independent E&P in Nigeria,” Avuru said.
He disclosed that OML 55 provides Seplat with a number of attractive opportunities to boost oil and gas output, which is consistent with the company’s strategy of prioritising those that offer near-term production growth, cash-flow and reserve replacement potential in the onshore and shallow water offshore areas of Nigeria. “We are pleased to have extended our operating partnership with NNPC whom we look forward to working with in our capacity as operator pursuant to the Joint Operating Model,” he added.
OML 55 covers an area of approximately 840km2 and is located in the swamp to shallow water offshore areas in the south eastern Niger Delta. The block contains five producing fields (Robertkiri, Inda, Belema North, Idama and Jokka). The majority of production on the block is from the Robertkiri, Idama and Inda fields, Seplat disclosed.
Seplat is planning another acquisition offshore, the company has been given until February 13, deadline to make a firm offer on its merger with Afren Plc, a U.K. oil and gas explorer.
