Seplat Energy Plc, a leading Nigerian energy company listed on the Nigerian Exchange and the London Stock Exchange, has purchased ExxonMobil’s entire offshore shallow water business in Nigeria for $1.2 billion.
The transaction is subject to Ministerial Consent and other required regulatory approvals, but it went into effect in January 2022.
The company stated that it has entered into an agreement with Exxon Mobil Corporation to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU).
The Transaction agreement also includes potential additional contingent consideration of up to $300 million in total, payable from 1 January 2022 to 31 December 2026, and subject to average Brent crude oil prices exceeding $70 per barrel and MPNU’s average working interest production exceeding sixty thousand barrels per day (60kboepd) (joint venture -150 kboepd) in such calendar year.
Seplat entered into a Sale and Purchase Agreement with its subsidiary, Seplat Energy Offshore Limited, 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, according to the company.
The transaction includes an established, high-quality operation with a highly skilled local operating team and a track record of safe operations, with a production capacity of 95 kboepd in 2020.
The transaction will result in the formation of one of the largest independent energy companies on both the Nigerian and London Stock Exchanges, and will strengthen Seplat Energy’s ability to drive increased growth, profitability, and overall stakeholder prosperity.
Based on 2020 working interest volumes, the transaction provides: an 186 percent increase in production from 51 kboepd to 146 kboepd, a 170 percent increase in 2P liquids reserves from 241 MMbbl to 650 MMbbl, and a 14 percent increase in 2P gas reserves from 1,501 Bscf to 1,712 Bscf, including significant undeveloped gas potential of 2,910 Bscf (JV: 7,275 Bscf).
It will also increase total 2P reserves by 89 percent, from 499 MMboe to 945 MMboe1. It will also include offshore fields with dedicated, MPNU-operated export routes, providing enhanced security and reliability.
In Nigeria, the MPNU asset portfolio consists primarily of: 40 percent operating ownership of four oil mining leases (OMLs 67, 68, 70, and 104) and associated infrastructure (NNPC is a 60 percent partner), the Qua Iboe Terminal, one of Nigeria’s largest export facilities, and a 51 percent interest in the Bonny River Terminal and Natural Gas Liquids Recovery Plants at EAP and Oso.
ExxonMobil’s deepwater assets in Nigeria are not included.
According to the company, MPNU will operate as a standalone subsidiary of Seplat Energy, and upon closing and receipt of the necessary regulatory approvals, Seplat Energy will align MPNU with its overall strategic goals and ESG objectives.