Gulf Oil and Gas accountACCOUNT

Sacoil Agrees Revised Terms for Entry into OPL 281

Source: www.gulfoilandgas.com 2/8/2012, Location: Africa

SacOil, the independent African upstream oil & gas company, announces it has agreed revised terms for its partnership with Transnational Corporation of Nigeria PLC (‘Transcorp’) and Energy Equity Resources (‘EER’) and has also agreed a specific issue of ordinary shares (‘SEDA shares’) to YA Global Masters SPV Ltd (“YA”).

1. Revised terms of the farm-in to licence OPL 281:

Highlights:
- A reduction in farm-in fees for SacOil and EER, its technical joint venture partner, from $32.5m to $24.5m.
- Transcorp will remain the operator of OPL 281 and will pay its 60% of the CAPEX costs to first production as opposed to SacOil and EER carrying 100% of the CAPEX costs as previously agreed.
- Transcorp to post the performance bond to the Nigerian Government.

Initiated by Transcorp, the revised terms followed as a result of a change of control in Transcorp. Pursuant to the change, Transcorp’s aim is to take full responsibility for the operation of the concession and to become a leading Nigerian indigenous oil & gas upstream company with production.

Following this revision, EER’s 50% portion of the fees is carried by SacOil as an interest bearing loan to EER that is repaid from EER’s entitlement to production in OPL 281. SacOil paid $12.5 million towards the Signature Bonus on 28 February 2011 and the outstanding $12m becomes due once the remaining conditions precedent to the farm-in agreement have been met. These include perfection of title and all the necessary Nigerian government and Nigerian National Petroleum Company (‘NNPC’) consents in relation to the licence.

According to the partners, a work programme budget of $15.0 million is estimated for phase 1 of the exploration of OPL 281 and involves the reprocessing of the existing 3D seismic data and the drilling of at least one well. A Competent Person’s Report issued by reserves auditing firm, AGR-TRACS International Limited, has attributed a gross unrisked contingent resource of approximately 100MMboe, with additional potential in two further prospects and deeper zones.

Commenting, Robin Vela, Chief Executive Officer of SacOil, said:
We are pleased with the revised terms as we will no longer be required to provide Transcorp with a carry on CAPEX costs from the point of entry to first oil. All costs are now carried proportionately to the equity owned by Transcorp, EER and SacOil. SacOil and EER will be actively involved in the operations through the Operations and Management Committees.

Commenting, Obinna Ufudo, Chief Executive Officer of Transcorp, said:
The revised agreement is in line with Transcorp’s vision of building a pan-African energy business with strong indigenous operational capabilities. We are now poised to lead the process of bringing the asset to production.

Commenting, Osamede Okhomina, Chief Executive Officer of EER, said:
The revised commercial terms reduces our CAPEX exposure whilst improving our rate of return in the project. Furthermore, EER has a key role to play in supporting Transcorp to bring the asset to production. We look forward to working with our partners on this project.

2. Issue of shares for cash to YA Global Masters SPV Ltd
SacOil shareholders ("Shareholders") are advised that 10 926 906 SEDA Shares have been issued to YA at a price of R0,44 per Share pursuant to the terms of the Standby Equity Distribution Agreement dated 12 October 2011 and approved by Shareholders in a general meeting on 17 November 2011.

Application has been made to the JSE Limited (“JSE”) to grant a listing of the SEDA Shares and to the London Stock Exchange for the admission of the SEDA Shares to trading on the AIM Market (‘AIM’). The listing of the SEDA Shares on the JSE and the admission of the SEDA Shares to trading on AIM are expected to take place on Thursday, 9 February 2012. The proceeds of the issue of the SEDA Shares will be utilised mainly to ensure that SacOil has sufficient short term cash to pay for costs in relation to proposals under consideration.

Acquisitions and Divestitures News in Nigeria >>

United States >>  6/11/2019 - Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), a subsidiary of Royal Dutch Shell plc announced it has reached an agreement for the sale ...
Kazakhstan >>  6/9/2019 - At the 23rd St. Petersburg International Economic Forum, President of LUKOIL Vagit Alekperov and Chairman of the Management Board of KazMunayGaz Alik ...

Russia >>  6/9/2019 - Gazprom and OMV signed at the St. Petersburg International Economic Forum 2019 the Contract on the amendments to the Basic Agreement on Asset Sale. Th...
Norway >>  6/7/2019 - PGNiG Upstream Norway will acquire 22.2 percent of shares in King Lear field – PL146 and PL333 licenses – from Total E&P Norge. The volume of producti...

Russia >>  6/7/2019 - As part of today’s Saint-Petersburg International Economic Forum, PAO NOVATEK has signed the Share Purchase Agreement (“Agreement”) with CNOOC Ltd. (...
Congo >>  6/6/2019 - New Age (African Global Energy) Limited announces that its subsidiary New Age M12 Holdings Limited has signed a Sale and Purchase Agreement (‘SPA’) wi...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


Nigeria Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 |

Oil & Gas Projects in Nigeria >>

More News

Related Links

AO BJ BW CD CG CI CM DZ EG ET GA GH GM GN GQ GW KE LR LY MA MG ML MR MZ NA NE NG RW SC SD SL SN SO ST SZ TD TN TZ UG ZA ZM
Gulf Oil and Gas
Copyright © Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.