/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES./
All dollar amounts in this press release are USD unless
otherwise indicated.
VANCOUVER, Oct. 31, 2018 /CNW/ - A consortium led by Vitol
and comprising Africa Oil Corp ("Africa Oil") (25%), Delonex Energy
Ltd. ("Delonex") (25%) and Vitol Investment Partnership II Ltd.
("Vitol") (50%), (collectively, the "Consortium"), is pleased to
announce that it has entered into a Share Purchase Agreement
("SPA") to acquire a 50% ownership interest in Petrobras Oil and
Gas B.V. for $1.407 billion.
BTG Pactual E&P B.V. will continue to own the remaining 50% of
POGBV. The transaction is subject to customary conditions
precedent. View PDF Version
The primary assets of POGBV are an indirect 8% interest in Oil
Mining Lease ("OML") 127, which contains the producing Agbami
Field, operated by affiliates of Chevron Corporation, and an
indirect 16% interest in OML 130, operated by affiliates of TOTAL
S.A., which contains the producing Akpo Field and the Egina Field,
which is expected to commence production by the end of
2018. Current production of 368,000 barrels per day is
anticipated to increase to over 568,000 barrels per day by the
second half of 2019.
Russell Hardy, CEO, Vitol said:
"Vitol has a long history of investing in Nigeria's energy sector. We are pleased
and proud to add this significant upstream asset to our
infrastructure and downstream Nigerian investments. POGBV has
a strong non-operated portfolio, managed by Chevron and Total and
which represents circa 20% of Nigerian production. Vitol looks
forward to continuing to grow and invest in Nigeria."
Africa Oil CEO Keith Hill
commented, "We are very pleased to be able to join Vitol and
Delonex in acquiring an interest in these established, low unit
cost, producing assets, with additional appraisal and development
upside, that are operated by some of the best companies in the
industry. With the addition of production and cash
flow, Africa Oil will transform into a significant,
Africa-focused, independent oil
company. Combining these assets with our Kenya development project and recently
rejuvenated exploration portfolio, we believe that Africa Oil is
exposed to high growth potential in the current and anticipated
strong oil price environment. The two producing fields have
consistently outperformed expectations and our goal will be aligned
with our operators and partners to keep the FPSOs as full as
possible for the foreseeable future."
Rahul Dhir, CEO of Delonex,
said: "We are delighted to join Vitol and Africa Oil in
acquiring an interest in these high quality assets. These assets
are operated by leading industry operators and have consistently
outperformed expectations. This acquisition represents an important
strategic step for our company. We look forward to working
with our operators and partners to further develop and achieve the
goals of the consortium and deliver value for the government and
nation of Nigeria."
The agreed base purchase price of $1.407
billion, is on a cash and debt free basis as of the
effective date of 1st January 2018
(the "Effective Date"). A deferred payment of up to $123 million may be due to the Seller depending
on the date and ultimate OML 127 tract participation in the Agbami
Field, which is subject to a redetermination process (see below).
The Consortium's funding required to ultimately close the
transaction will be reduced by any leakage paid to the Seller by
POGBV, including dividends, and increased by any contributions made
to POGBV by the Seller during the period between the Effective Date
and completion. POGBV has an existing reserve-based lending
facility, with a syndicate of international banks and commitments
of $1.245 billion, which POGBV and
the Consortium believe may be increased. Given the anticipated
time required to complete the transaction, POGBV's debt capacity,
forecast post effective date cash flow and the structure of the
transaction, Africa Oil expects to fund its share of the
acquisition with cash on hand.
The three fields in these two licenses are all giant fields,
located over 100 km offshore Nigeria, and are some of the largest and
highest quality in Africa. Two of
these fields, Agbami and Akpo, have been on production since 2008
and 2009, respectively, and in 2017 averaged a combined gross
production rate of approximately 368,000 barrels of oil per day.
Lifting costs in 2017 were well below $10/bbl. The TOTAL-operated Egina development
project in OML 130 is the largest investment project currently
ongoing in the oil and gas sector in Nigeria. The Egina FPSO, with a 200,000 barrel
of oil per day capacity is currently on station and is being hooked
up to existing wells. Egina first oil is expected before the end of
2018 and quickly ramp up to plateau production of approximately
200,000 barrels of oil per day during the first half of 2019. The
fields all have high quality reservoirs and produce light sweet
crude oil with state of the art Floating Production, Storage and
Offloading ("FPSO") facilities.
During 2017, daily oil production from the Agbami Field averaged
approximately 240,000 barrels of crude oil. Production commenced
from the field in 2008 and has been on plateau for over 8 years. An
infill drilling program is ongoing, aimed at extending plateau into
2020. The field spans OML 127 and OML 128 and is subject to a
unitization agreement, with 62.5% of field production currently
allocated to OML 127. A redetermination process has been subject to
expert review and arbitration in order to finally determine an
increase in the portion of the Agbami Field attributable to OML
127. During 2017, POGBV's entitlement of daily oil production
averaged approximately 21,000 barrels of crude oil (based on a
62.5% tract participation).
During 2017, daily oil production from the Akpo Field averaged
approximately 128,000 barrels of crude oil. Production commenced
from the field in 2009. During 2017, POGBV's entitlement of daily
oil production averaged approximately 26,000 barrels of crude
oil.
In addition to the current fields under production and
development there are other growth opportunities in horizons not
yet under developed in existing fields and adjacent fields being
considered for development together with exploration
opportunities.
About Africa Oil Corp.
Africa Oil Corp. is a Canadian
oil and gas company with assets in Kenya and Ethiopia. The Company is listed on the Toronto
Stock Exchange and on Nasdaq Stockholm under the symbol "AOI".
About Vitol
Vitol is an energy and commodities company; its primary business
is the trading and distribution of energy products globally – it
trades over seven million barrels per day of crude oil and products
and, at any time, has 250 ships transporting its cargoes.
Vitol's clients include national oil companies, multinationals,
leading industrial and chemical companies and the world's largest
airlines. Founded in Rotterdam in
1966, today Vitol serves clients from some 40 offices worldwide and
is invested in energy assets globally including: circa 18mm3 of
storage across seven continents, 480kbpd of refining capacity and
5,000 service stations across Africa, Australia, Eurasia and in Northwest Europe. Revenues in 2017 were
$181 billion.
About Delonex
Delonex is a leading sub-Saharan oil and gas company focused on
exploration, development and production and with operations in
Chad, Kenya and Ethiopia. Delonex is backed by an
investor group including the International Finance Corporation (a
member of the World Bank Group) and Warburg Pincus, a leading
global private equity firm which has invested or committed over
$14 billion across more than 90
energy-related companies.
Additional Information
This information is information that Africa Oil Corp. is obliged
to make public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency of
the contact person set out below at 5:00
Eastern Time on October 31,
2018.
Cautionary Language
Certain statements made and information contained herein
constitute "forward-looking information" (within the meaning of
applicable Canadian securities legislation). All statements in this
news release, other than statements of historical facts are
forward-looking statements. Such statements and information
(together, "forward looking statements") relate to future events or
the Company's future performance, business prospects or
opportunities. Forward-looking statements include, but are not
limited to, the expected increase in production from Agbami and
Akop fields and the timing thereof, the expected closing date of
the Transaction, the ability of Africa Oil to fund its share of the
acquisition with cash on hand, the timing for commencement of, and
reaching plateau, production from the Egina field, the amount and
timing of the increased reserve based lending facility, future
capital expenditures and their allocation to exploration and
development activities, future drilling and other exploration and
development activities , that are based on forecasts of future
results, estimates of amounts not yet determinable and assumptions
of management.
All statements other than statements of historical fact may
be forward-looking statements. Statements concerning proven and
probable reserves and resource estimates may also be deemed to
constitute forward-looking statements and reflect conclusions that
are based on certain assumptions that the reserves and resources
can be economically exploited. Any statements that express or
involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using words or
phrases such as "seek", "anticipate", "plan", "continue",
"estimate", "expect, "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should",
"believe" and similar expressions) are not statements of historical
fact and may be "forward-looking statements". Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. The Company believes that the expectations reflected in
those forward-looking statements are reasonable, but no assurance
can be given that these expectations will prove to be correct and
such forward-looking statements should not be unduly relied upon.
The Company does not intend, and does not assume any obligation, to
update these forward-looking statements, except as required by
applicable laws. These forward-looking statements involve risks and
uncertainties relating to, among other things, changes in oil
prices, results of exploration and development activities,
uninsured risks, regulatory changes, defects in title, availability
of materials and equipment, timeliness of government or other
regulatory approvals, actual performance of facilities,
availability of financing on reasonable terms, availability of
third party service providers, equipment and processes relative to
specifications and expectations and unanticipated environmental
impacts on operations. Actual results may differ materially from
those expressed or implied by such forward-looking
statements.
The Company provides no assurance that forward-looking
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements. The Company does not
assume the obligation to revise or update these forward-looking
statements after the date of this document or to revise them to
reflect the occurrence of future unanticipated events, except as
may be required under applicable securities laws.
Market data and other statistical information used herein are
based on internal company research, independent industry
publications, governments publications, reports by market research
firms or their published independent sources. Industry
publications, governmental publications, market research surveys
and forecast generally state that the information contained therein
has been obtained from sources believed to be reliable. Although
the Company believes such information is accurate and reliable, it
has not independently verified any of the data from third party
sources cited or used for our management's industry estimates, nor
has the Company ascertained the underlying economic assumptions
relied upon therein. While the Company believes internal company
estimates are reliable, such estimates have not been verified by
any independent sources, and the Company makes no representations
as to the accuracy of such estimates.
SOURCE Africa Oil Corp.