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Chappal Petroleum Development Company, an indigenous oil and gas company, is one of the strongest bidders for the ExxonMobil Nigeria oil and gas assets that are up for sale, The Business Intelligence Africa (TBI Africa) has learnt.
Chappal Petroleum Development Company reportedly was founded by Mr. Austin Avuru, one of Nigeria’s prominent and respected oil and gas executives, when he left Seplat Energy Plc as the Chief Executive Officer.
Chappal Petroleum stands a good chance to clinch the deal in view of the withdrawal of Warburg Pincus-backed Trident Energy which was Seplat Energy Plc’s partner that was expected to bring a substantial part of the estimated $1.5 billion ExxonMobil Nigeria assets.
Besides, it was learnt that the United Kingdom’s Cairn Energy, with about US$908billion market capitalization, has teamed up with Chappal Petroleum to bid for the assets.
With the backing of Cairn Energy, Chappal Petroleum is also said to be chasing several other Nigerian assets, which some of the International Oil Companies (IOCs) in Nigeria want to divest especially on onshore and swamp areas.
The participation of Avuru’s company in bidding for the assets, it was gathered, was the major reason Avuru was asked to step down from the Board of Seplat Energy Plc, when Seplat discovered his (Avuru’s) company was a key contender for the assets. Avuru was a non-executive director on the board of Seplat Energy Plc.
Meanwhile, an industry source stated that other firms are vying for the assets but top of the list and ExxonMobil’s preferred bidders are Seplat Energy Plc and Chappal Petroleum Development Company. ExxonMobil is still processing all the bids, he said, adding that offer is still open but the oil giant will close transaction between now and end of February as the senior partner in the assets ownership, the Nigerian National Petroleum Company Limited (NNPC) had earlier given approval for sale to Seplat but that was before the pull out of Trident Energy from the deal.
However, the competition is getting keener as the conclusion of sale of the assets gets closer. This is despite the much reported defunding of oil and gas projects by financial institutions. Perhaps the appetite for financing acquisition of these assets is because they are already producing and are viewed as cash cows.
“The contest shows that despite talk of the energy transition making it harder to finance oil and gas projects and acquisitions in Africa, there is still an appetite for select Nigerian assets divested by oil majors, and financing remains available,” said a report.
ExxonMobil’s assets up for sale comprise the 40 per cent interests in the Qua Iboe fields of four blocks and pipelines in oil mining leases (OMLs) 67, 68, 70 and 104 located in shallow water. They are more likely to deliver reliable revenues and carry less risk of theft and sabotage than assets located in the onshore swamp areas. OML 70 currently produces about 150,000 barrels per day.
Seplat Energy Offshore Limited, a wholly owned Nigerian subsidiary of Seplat Energy Plc, has entered into a Sale and Purchase Agreement to acquire the entire share capital of MPNU for a purchase price of $1,283 million plus up to $300 million contingent consideration, subject to lockbox, working capital and other adjustments at closing relative to the effective date
· The Transaction encompasses the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria, which is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations, producing 95 kboepd (W.I.) in 2020(92% liquids)
Transformational impact
· The Transaction will create one of the largest independent energy companies on both the Nigerian and London Stock Exchanges, and bolster Seplat Energy's ability to drive increased growth, profitability and overall stakeholder prosperity
· Based on 2020 pro forma working interest volumes for Seplat Energy and MPNU, the transaction delivers:
o 186% increase in production from 51 kboepd to 146 kboepd
o 170% increase in 2P liquids reserves, from 241 MMbbl to 650 MMbbl
o 14% increase in 2P gas reserves from 1,501 Bscf to 1,712 Bscf, plus significant undeveloped gas potential of 2,910 Bscf (JV: 7,275 Bscf)
o 89% increase in total 2P reserves from 499 MMboe to 945 MMboe[1]
o Includes offshore fields with dedicated, MPNU-operated export routes offering enhanced security and reliability
There is a summary of what we are getting now just put a average price of a barrel of oil over the year and you have the gross take
damo
Sure the company would have run the slide rule over the numbers, before spending 1.2 billion !!
The trouble with some people on these sites is
They don’t trust the company they are investing in
In my view, that adds up too dont invest in it lol
GLA
Manan
Leave well alone !!
If it looks to good to be true it usually is !!
Nobody will compensate you in anyway if they delist
My opinion only
Paid between 682 to 798 a share
Thats a huge black hole in there account !!
3.36 on the ask now
Blackrock wont be happy bunnies