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Seplat Energy to acquire Mobil Producing for $1.28 bln

By Samuel Bankole 

Seplat Energy Plc on Friday announced that it has entered into an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited (“MPNU”) from Exxon Mobil Corporation, Delaware.

In a regulatory filing with the Nigerian Exchange Limited, the energy firm said the completion of the Transaction is subject to Ministerial Consent and other required regulatory approvals.

Seplat said it plans to finance the acquistion through a combination of existing cash
resources and credit facilities of Seplat Energy, and a new $550 million senior term loan facility and $275 million junior offtake facility.

It also plans a global financing syndicate comprising Nigerian and international banks, as well as commodity trading companies.

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 percent liquids).

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.

The statement noted that based on 2020 pro forma working interest volumes for Seplat Energy and MPNU, the transaction would delivers 186 percent increase in production from 51 kboepd to 146 kboepd.

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It will also lead to an 170 percent increase in 2P liquids reserves, from 241 MMbbl to 650 MMbbl; 14 percent 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); 89 percent increase in total 2P reserves from 499 MMboe to 945 MMboe1; Includes offshore fields with dedicated, MPNU-operated export routes offering enhanced security and reliability.

Mobile Producing Nigeria has a 40 percent operating ownership of four oil mining leases (OMLs 67, 68, 70, 104) and associated infrastructure (NNPC is the 60 percent partner)
It currently operates the Qua Iboe Terminal, one of Nigeria’s largest export facilities, also a 51 percent interest in Bonny River Terminal and Natural Gas Liquids Recovery Plants at EAP and Oso.

Speaking on the transaction, Chairman of Seplat Energy, Bryant (ABC) Orjiako said: “This is a transformational acquisition for Seplat Energy that strengthens our partnership with the national oil company, the NNPC, and consummates the spirit of the newly enacted PIA.

“As a significantly larger business, with a stronger resource base and greatly enhanced capabilities, we will be better positioned to provide sustainable energy solutions that drive growth and profitability for the benefit of all our stakeholders, particularly our host communities and the wider Nigerian economy.

“We fully support the aims of the Federal Government’s “Decade of Gas”, and this acquisition will accelerate our development of Nigeria’s gas resources to help achieve a just transition for our rapidly growing country.”

Also, the Chief Exectuive of Seplat Energy, Roger Brown said: “This transaction underpins Seplat Energy’s drive to be a leader in the growth of the indigenous independent energy sector in Nigeria.

The acquisition is a perfect fit with our strategy to build a sustainable business and deliver energy transition in Nigeria. Our financial strength has enabled us to attract high quality local and international capital providers to fund this transaction without diluting our existing shareholders and reflects our deliberate approach to capital allocation.

“We are determined to drive our growth through the extensive low-cost and low-risk production opportunities it delivers in the near term, whilst also developing longer-term opportunities to monetise our significant gas resources through domestic and export opportunities.

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