Texas-based, ExxonMobil Corporation has explained that its recent deal with a Nigerian independent oil and gas company, Seplat Energy Plc, will enable it maximize the value from its deepwater operations.
ExxonMobil reached an agreement to sell its equity interest in Mobil Producing Nigeria Unlimited (MPNU) to Seplat Energy through its wholly-owned subsidiary, Seplat Energy Offshore Limited.
When finalized, the sale will include the Mobil Development Nigeria and Mobil Exploration Nigeria equity ownership of Mobil Producing Nigeria Unlimited, which holds a 40% stake in four oil mining licenses, including more than 90 shallow-water and onshore platforms and 300 producing wells.
The deal worth almost $1.6billion is the first transaction to be announced since the Nigerian Government’s recently ratified Petroleum Industry Act (PIA), and supports its key objectives.
President, ExxonMobil Upstream Oil and Gas, Liam Mallon, said in a statement that “This sale will allow us to prioritize competitively advantaged investments in our strategic assets, and 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.”
Besides, ExxonMobil said it will maintain a significant deepwater presence in Nigeria, including interests in the Erha, Usan and Bonga developments via Esso Exploration and Production Nigeria Limited, and Esso Exploration and Production Nigeria (Deepwater) Limited.
Also, the sale will not result in any loss of employment and is expected to close later this year subject to regulatory and other approvals.
This sale will allow us to prioritize competitively advantaged investments in our strategic assets, and it supports the Nigerian government’s efforts to grow its oil and gas operations.
Deal components
In a statement on Thursday, Seplat Energy listed on the Nigerian Exchange and the London Stock Exchange, announced that it has entered into an agreement to acquire the entire share capital of Mobil Producing from ExxonMobil Corporation.
It however, noted that completion of the transaction is subject to ministerial consent and other required regulatory approvals.
The Sale and Purchase Agreement (SPA) covers the acquisition of the entire share capital of MPNU for a purchase price of $1.283 billion plus up to $300 million contingent consideration, subject to lockbox, working capital and other adjustments at closing relative to the effective date.
This includes 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% liquids).
Commenting, Chairman of Seplat Energy, Dr. Bryant 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.”
On his part, CEO 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.
“This is a win-win for both companies. Together, we will strengthen our focus on profitability and cash generation to reinvest in Nigeria’s energy development.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I look forward to welcoming them to the Seplat Energy family.”
