Vaalco Vitality Inc. has entered a deal to buy Stockholm-based Svenska Petroleum Exploration AB, increasing its West African footprint, the Houston-based oil and fuel exploration and manufacturing firm mentioned.
Upon completion of the $66.5 million all-cash transaction, Vaalco takes over Svenska’s 27.39 % non-operator working stake (30.43 % paying curiosity) within the CI40 license in Cote d’Ivoire. The license contains the Baobab deepwater subject, which has present manufacturing of about 4,500 barrels of oil equal per day (boepd) internet to Svenska. Baobab holds 21.7 million boe, 97 % of that are oil, in proved and possible reserves internet to Svenska, Vaalco mentioned in a information launch saying the merger.
Canadian Pure Sources Ltd. operates the block with a 57.61 % working curiosity whereas Ivory Coast nationwide oil and fuel firm Petroci Holding holds the remaining 15 % working curiosity.
One other subject below the license, Kossipo, may very well be developed sooner or later, with two wells appraised 2002 and 2019, Vaalco mentioned.
Vaalco would additionally be a part of United States vitality giants Chevron Corp. and Exxon Mobil Corp. in Oil Mining Lease (OML) 145 in Nigeria if the transaction is consummated. Svenska holds a 21.05 working curiosity within the Uge discovery whereas Chevron and ExxonMobil maintain 21.05 % every. Native companions Oando PLC and Nigerian Petroleum Growth Co. maintain 21.05 % and 15.8 % respectively.
Nonetheless Vaalco mentioned of OML 145, “There are minimal commitments on this license curiosity and no drilling or growth is at present deliberate”.
CI40, although, “has been considerably de-risked because of growth drilling (24 manufacturing and 5 injection wells) since discovery in 2001, with manufacturing so far of roughly 150 MMBOE on a gross foundation”, Vaalco mentioned.
9 of the wells are subsea producing wells which can be tied to a floating, producing, storage and offloading (FPSO) vessel, it famous. The FPSO unit is deliberate to be turned off 2025 for upkeep and anticipated to renew manufacturing 2026, Vaalco mentioned.
Vaalco mentioned “important growth drilling” is predicted to start out 2026 “with significant additions to manufacturing from the principle Baobab subject in CI-40, in addition to potential future growth of the Kossipo subject additionally on the license”. The three way partnership companions have already began ordering long-lead drilling objects, it mentioned.
Vaalco put the web money vary at round $30 million to $40 million. “The gross buy value can be partially funded by a pre-closing dividend of money on Svenska’s steadiness sheet to the Vendor with the steadiness funded by a portion of VAALCO’s cash-on-hand with no issuance of debt or fairness”, it mentioned.
Vaalco mentioned Svenska has “enticing concession phrases with an 80 % price restoration cap, a 25 % price restoration uplift on growth expenditures, and a 53 % contractor revenue oil take”.
Svenska additionally has “comparatively low anticipated working bills of about $15 per BOE and crude value realizations carefully aligned with Brent oil costs”.
Vaalco expects to shut the acquisition within the second quarter of 2024.
Vaalco chief government George Maxwell mentioned in an announcement, “Constructing a diversified portfolio of excessive performing belongings is a key element of our strategic imaginative and prescient”.
“We consider that this acquisition enhances all the important thing facets of our technique”, Maxwell mentioned. “It gives us with extra diversification, robust manufacturing and reserves from a confirmed producing asset, important natural upside alternative that’s effectively outlined, enhances our capacity to generate sustainable money circulate and proceed to return money to shareholders”.
To contact the writer, e mail jov.onsat@rigzone.com