The UK-based oil explorer Afren Plc has said today it had agreed to buy Devon Energy Corp's oil interests in Côte d'Ivoire for $205 million. Africa-focused Afren said in a statement posted on its Web site that the assets being bought had daily production of 3,000 barrels of oil equivalent and net proved plus probable reserves of 28 million barrels.
The acquisition will be funded by a financing package arranged by French bank BNP Paribas, Afren said. In November, Afren said it agreed to buy Devon's interests in Ghana and Angola.
The Board of Afren Plc announces that it has entered into an agreement with Devon Energy Corporation (“Devon”) to acquire its interests in Côte d'Ivoire comprising a 47.96% working interest and operatorship of the producing Block CI-11, a direct 65% interest and operatorship with rights over an additional 15% interest in the undeveloped Block CI-01and a 100% interest in the onshore Lion Gas Plant (“LGP”), effective 30th June 2007.
Osman Shahenshah, Chief Executive of Afren, commented:
“This material transaction, which follows on from the Company's acquisition of Devon's assets in Ghana and Angola, represents a step change addition to Afren's existing portfolio. The portfolio of businesses acquired from Devon offers immediate production for Afren, ahead of production start-up from the Okoro Setu project in Nigeria.
“Through a single action, and through our partnership with the National Oil Company of Côte d'Ivoire, PETROCI, we have acquired a fully functioning business in Côte d'Ivoire, with the combination of production, near term development, appraisal and exploration upside, as well as midstream interests and a full workforce, which we will now look to further expand. We look forward to building on our partnership with PETROCI and our overall position in Côte d'Ivoire.”
KEY HIGHLIGHTS
• Agreed consideration for the acquisition is US$205 million
• The acquisition will be funded through a financing package arranged by BNP Paribas
• The acquisition offers access to immediate oil and gas production, proven reserves and cash flow:
• Current net daily volumes of approximately 3,000 entitlement barrels of oil equivalent per day ("boepd") from upstream oil and gas production and NGL extraction (approximately 5,000 boepd on a working interest basis)
• Combined net 2P reserves for the Block CI-01 and Block CI-11 interests of approximately 28 million barrels of oil equivalent ("mmboe") as at 30th June 2007
The portfolio offers significant upside:
• Near term opportunity to optimize and increase Block CI-11 production through a low risk wireline and rig based workover programme, in addition to the development of additional reservoir intervals
• Existing proved undeveloped reserves on Block CI-01 present an attractive development opportunity
• Targeting total net daily production volumes in excess of 6,000 entitlement boepd by 2010 from the upstream assets and the LGP
• Afren will take on operatorship, together with Afren’s partner PETROCI, the National Oil Company of Côte d’Ivoire, of a fully integrated gas project and assume a competent and skilled local workforce
• The acquisition marks an important strategic entry into Côte d’Ivoire and Afren is delighted to have formed a broad African strategic alliance with Cherokee Allied Oil and Gas Corporation ("Cherokee") and to be working alongside PETROCI
• The acquisition is subject to customary regulatory and governmental approvals
AFREN POST ACQUISITION
• The acquisition significantly strengthens Afren’s existing portfolio
• Increases Afren’s existing 2P reserve base by 67% to 70 mmboe
• Immediate production and cash flow ahead of production start-up at the Okoro Setu project in Nigeria
• A material and balanced platform in a new country with significant upside, taking the total portfolio to 17 assets in 7 countries in less than three years
• Portfolio and product diversification with oil, gas and high-value liquid extraction
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