NIGERIA – Seplat Energy Plc has announced an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation, Delaware for US$1.28 billion.
The transaction is subject to customary closing conditions including Ministerial Consent and regulatory approvals from the Nigerian Upstream Petroleum Regulatory Commission.
The agreement includes potential additional contingent consideration of up to US$300 million in total, payable over the period 1 January 2022 to 31 December 2026.
The transaction encompasses the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria.
“The acquisition is a perfect fit with our strategy to build a sustainable business and deliver energy transition in Nigeria,” said Roger Brown, CEO of Seplat Energy.
Seplat will fund the acquisition via a combination of debt and cash on its balance sheet.
It claims that it will utilize existing cash resources and credit facilities of Seplat Energy, a new US$550 million senior term loan facility, and a US$275 million junior offtake facility.
Global financing syndicate comprising Nigerian and international banks, as well as commodity trading companies will also play a role in the funding of this transaction.
The company anticipates the creation of the largest independent energy companies on both the Nigerian and London Stock Exchanges while bolstering the firm’s ability to drive increased growth, profitability, and overall stakeholder prosperity.
The transaction is expected to deliver a 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.
The company also expects a 14 percent increase in 2P gas reserves, from 1,501 Bscf to 1,712 Bscf, along with a significant undeveloped gas potential of 2,910 Bscf (JV: 7,275 Bscf).
In addition, the acquisition of ExxonMobil’s shallow water assets in Nigeria is expected to bring an 89 percent increase in total 2P reserves, from 499 MMboe to 945 MMboe.
The transaction is the first one to be announced since the Nigerian Government recently ratified the Petroleum Industry Act (PIA) and supports the objectives of this act and Nigeria’s energy transition.
Upon the closing of the transaction following the receipt of required regulatory approvals, MPNU will operate as a standalone subsidiary of Seplat Energy.
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