Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
“The Aje field development plan is focused on producing and commercialising gas and has the potential to provide low emission energy corresponding to 5% of the total power production of Nigeria,” he said.
PetroNor will now proceed with final steps to complete the transaction - including the issuance of new PetroNor shares for distribution to Panoro shareholders – a process expected to take place in the next 90 days.
The remaining partners in Aje are NewAge, ADM Energy and Energy Equity Resources.
By Iain Esau in London
Oslo-listed PetroNor E&P’s acquisition of a major stake in the Aje field offshore Nigeria has been approved by Abuja’s authorities, clearing the path for a new FPSO to be brought onto the asset.
The deal could also prepare the ground for a potential floating liquefied natural gas project at the field.
PetroNor struck a deal in October 2019 to buy Panoro Energy’s 12.1913% economic interest in Aje in Oil Mining Licence 113, but the transaction was held up by bureaucracy and Covid-related issues.
However, the newly created Nigeria Upstream Petroleum Regulatory Commission (formerly Nigeria’s Department of Petroleum Resources) has now given the green light to the deal.
Nigerian independent Yinka Folawiyo Petroleum will remain operator of Aje, with PetroNor assuming the role of technical operator.
These two companies are also establishing a special purpose company – owned 55% by Yinka Folawiyo and 45% by PetroNor – to develop the next phases of Aje which will exploit additional liquids and start to tap the field’s gas resources.
Aje is currently producing about 1300 barrels per day of oil via the small Front Puffin floating production, storage and offloading vessel.
Upstream understands the partners aim to install a bigger FPSO at the field - replacing the Front Puffin - to both boost oil production and also improve associated gas handling capacity.
This bigger FPSO will re-inject the gas for later use, while focusing on the production of oil and condensate.
A source familiar with the next phase of Aje said the partners have already identified their preferred FPSO and the replacement vessel could be on location later this year.
A rig will also be brought to Aje to drill two extra development wells to be tied back to the larger FPSO, with the ultimate objective of boosting output to 8000-9000 bpd.
Commercialising Aje’s natural gas could see the new FPSO separate the gas from the field’s liquids and then pipe it to a potential floating LNG vessel moored nearby, a solution anther source described as “elegant.”
Alternatively, the gas could be processed onshore, albeit this approach would come with land acquisition challenges.
A decision on the optimum development solution is set to be taken this year.
The field’s gas could be exported as well as sold into the Nigerian market.
Aje currently houses about 600 billion cubic feet of proven and probable gas reserves, but could hold double this amount, said a well-placed source, if next year’s development wells also explore the resource potential of deeper reservoirs.
Commenting on securing government go-ahead for the Aje deal, PetroNor’s interim chief executive Jens Pace said: “The receipt of this long-awaited consent is exciting news for (us) and for the development of OML 113.”
spikey j mostly comments on ADM and BP yet he has no shares in both, your a troll
Andrews has over 35 years’ experience in infrastructure development, investing, public-private partnerships and strategic advisory work with governments, regional and international corporations and development finance institutions, according to ADM.
“During his career, in differing senior roles, he has overseen the investment of approximately $10 billion and originated $100 billion of investments in natural resources and infrastructure deals across the African continent on behalf of investee institutions,” added the company.
At the AFC, he oversaw the growth of assets under management from $1 billion to over $8.4 billion including significant investments in the oil and gas sector.
https://www.reuters.com/article/ozabs-uk-nigeria-oil-idAFKBN2C31QF-OZABS
Assuming Barracuda-5 is brought onstream, ADM then intends to fund an estimated subsequent capital spend of about $100 million via offtake prepayments from oil traders, local bank debt and its cash flow from Barracuda.
ADM could also, potentially, access up to $120 million of funding that may be available under its memorandum of understanding with Trafigura, plus additional funds from DBI.
Barracuda’s production would augment ADM’s existing output from its only other asset, the Yinka Folawiyo-operated Aje field offshore Nigeria.
ADM estimates that 73 million barrels of recoverable oil is held in Barracuda’s D-1B reservoir, with additional upside held in two other identified reservoirs.
This resource figure comes from ADM and is based on a 2016 Ryder Scott assessment for the field which estimated in-place reserves, but not recovery rates.
As for the terms of the Barracuda acquisition, ADM is buying, for $1.3 million, an indirect stake in the field.
The deal’s structure will see ADM acquiring 51% of a local company called Karra Oil Noble Hill that is wholly-owned by another Nigerian player, Karra Oil & Gas.
Karra Oil Noble holds a 70% interest in Barracuda, while the remaining 30% stake is held by Noble Hill Network, another Nigerian player.
Barracuda’s RSC entitles the holders to a 15% net profit interest in cash flows from any development in exchange for funding 100% of the capital costs.
In addition, the RSA holders will recover 2.35 times their capex from up to 82.5% of Barracuda’s operating cash flows.
ADM will provide 100% of the capex on behalf of the other partners, recovering this outlay from cash flows.
Arden, ADM’s in-house broker, noted that the deal’s complex nature means that “it is not easy to immediately see what the company’s net interest is,” but based a few key assumptions calculates’ ADM’s net entitlement interest is 9.5%".
Commenting on the deal, DBI chairman Zubair al Zubair said: “We partnered with ADM at the end of last year because their strategy aligned with our own of seeking out investment opportunities in the energy sector in Africa."
"The Barracuda field, an attractive near-term production asset with significant potential upside, is the type of excellent opportunity we envisioned when we first decided to collaborate with ADM."
As well as London, ADM shares also trade on the Berlin and Frankfurt stock exchanges.
London-listed junior ADM Energy has struck a deal to acquire a material stake in a 73 million-barrel oil discovery offshore/swamp Nigeria that is set to be fast-tracked to first oil and could potentially produce up to 23,000 barrels per day of crude.
This agreement is a good example of the trend in Nigeria for well-funded companies that have ambitious executives with significant indigenous knowledge securing access to undeveloped oil and gas fields that can be tapped quickly to produce cash and accelerate returns.
ADM will secure an indirect interest in the untapped Barracuda discovery in the Niger Delta where a key well is set to be drilled this year and, assuming a drill stem test is successful, will be brought on stream rapidly.
Four wells have already been drilled on the swamp oilfield, which is located in hydrocarbon-rich Bayelsa State and covered by a risk sharing contract carved out of Emerald Energy Resource-operated oil mining licence 141.
“We’ve secured control over the Barracuda field in an area that’s thoroughly explored – the golden triangle,” ADM chief executive Osamede Okhomina told Upstream, describing a play close to the Brass oil terminal and oilfields in Nembe Creek.
He said: “We can use analogue data from those fields around us to get a sense of the oil quality. From a geological point of view, we consider Barracuda is totally de-risked.”
A firm plan has been developed to drill a fifth well — Barracuda 5 — on the field in the fourth quarter of this year and, assuming success, Barracuda will be developed in stages.
“We’ve already started well planning and are working on a conceptual development and we’ve spoken to Trafigura about financing the development and offtake facilities," said Okhomina.
First oil from an extended well test for three-to-six months would be barged to market, he explained.
For a full-field development, two export options are being considered: either barging the crude to Brass oil terminal or to a floating storage and offloading vessel chartered by ADM.
Four further wells could be drilled on the field, boosting production and potentially underpinning the need for a pipeline running direct to the Brass terminal.
ADM’s internal estimate suggests that first oil of 4000 bpd may be possible in the second half of 2021, further increased by additional drilling.
After the expected completion of a new competent persons report within the next few months and further technical appraisal work, ADM said it may be possible to increase production to about 23,000 bpd by 2026 by drilling six wells.
A 12-kilometre pipeline to Brass terminal could reduce operating expenditure to $12 per barrel from $20 per barrel.
ADM plans to finance the initial appraisal-development well 100% via a loan from its existing funding partner Dubai Bridge Investments (DBI).
Check the source, who sells a $400M oil field on a website?? Come on dude.
CEO has invested in every single placing along side directors. By my estimate over £70k!
https://www.panoroenergy.com/wp-content/themes/Avada/cision/releasesingledetail.html?releaseIdentifier=AD560F5AE3E01C21
Trafigura just supported one of ADME's Aje partners. Looks like they're keen to get in on the action!
Wonder if the short sellers will be caught out by this.
https://en.wikipedia.org/wiki/Amal_Pepple
Osa's Mother is a very well decorated civil servant and former Minister in Nigeria!
I wonder if the REDDIT frenzy has pulled traders attention away from ADME??? Low volumes and not much discussion going on here.