Seplat buys ExxonMobil’s Nigerian shallow water assets


Seplat and ExxonMobil

By Solomon Asowata

Seplat Energy Plc, a leading Nigerian energy company, said it had entered into an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited (“MPNU”) from ExxonMobil Corporation, Delaware, U.S.

Seplat Energy made the announcement in a statement issued on Friday, in Lagos, by its Chief Financial Officer, Mr Emeka Onwuka.

The statement said the completion of the Transaction was, however, subject to Ministerial Consent and other required regulatory approvals.

It said the transaction agreement included potential additional contingent consideration of up to $300 million in total, payable over the period Jan. 1, 2022, to Dec. 31, 2026.

The statement said this was contingent upon average Brent crude oil prices exceeding $70 per barrel and subject to MPNU’s average working interest production exceeding 60 kilo barrels of oil equivalent (kboed) (JV: 150 kboepd) in such calendar year.

It said the transaction encompassed the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria.

According to the statement, the business was 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 per cent 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.

“This is the first transaction to be announced since the Nigerian Government’s recently ratified the Petroleum Industry Act (PIA) and supports its key objectives.

“Seplat Energy is fully committed to working with the Nigerian Government to bring these strategically important national assets fully into Nigerian ownership alongside NNPC.

“Development of MPNU’s gas resources will support the Federal Government’s objective to achieve a pragmatic, progressive and just energy transition for Nigeria”, it said.

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Dr Bryant Orjiako, Chairman of Seplat Energy, said the move would strengthen the company’s partnership with the NNPC and consummates the spirit of the newly enacted PIA.

He said the company would now be better positioned to provide sustainable energy solutions that drive growth and profitability for the benefit of all its 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,” Orjiako said.

Similarly, Mr Roger Brown, Chief Executive Officer of Seplat Energy, said the transaction underpinned Seplat Energy’s drive to be a leader in the growth of the indigenous independent energy sector in Nigeria.

He said: “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.

“This is a win-win for both companies. Together, we will strengthen our focus on profitability and cash generation to re-invest in Nigeria’s energy development.”

On his part, Mr Liam Mallon, President, ExxonMobil Upstream Oil and Gas, said the sale would allow the company to prioritise competitively advantaged investments in its strategic assets.

He noted that it supports the Nigerian government’s efforts to grow its oil and gas operations.

“We value the relationships we have spent decades building with the government and people of Nigeria, which will continue as we maximize the value from our deepwater operations,” Mallon added.

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