LONDON (Alliance News) - MX Oil PLC shares rose on Wednesday after the company said the operator of the Aje field offshore Nigeria has started to pump oil out of the field, prompting the potential for MX Oil to complete the sale of its interest in the field imminently.
MX Oil shares were trading up 19% to 1.01 pence per share on Wednesday morning.
MX Oil has been investing indirectly into OML 113, the licence which holds the Aje field, through a subsidiary of Jacka Resources Ltd. The Aje field is operated by Yinka Folawiyo Petroleum Co Ltd and the other partner on the licence is Panoro Energy.
Oil produced from the Aje field will be stored on the floating production, storage and offloading vessel, which has been commissioned and has the capacity to store up to 750,000 barrels of oil and the ability to accommodate production rates up to 40,000 barrels per day, MX Oil said.
Flow rates will be provided following a period of commissioning and well stabilisation.
"We are very pleased that oil production has commenced from the Aje field. This is testament to the hard work by the operator, partners and all those involved with the project," said MX Oil Chief Executive Stefan Olivier.
The start of production is very significant for MX Oil as the company has agreed to sell an option to GEC Petroleum Development Co over MX Oil's indirect interest in the Aje field, and MX Oil has already indicated the option would likely be exercised once production began.
GEC Petroleum is set to pay USD18.0 million to acquire MX Oil's investment in the field, but MX Oil has given the company more time to secure the funding needed to complete the deal and secure the option.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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