The separate investment and shareholders agreement concerning OML 113 between two Lagos based companies PetroNor E&P and Yinka Folawiyo Petroleum(YFP) has created a joint Special Purpose Vehicle (SPV) called Aje petroleum, to further develop the oil and gas field.
According to the details of the contracts seen by BusinessDay, the ownership of Aje Petroleum is to be shared between YFP and PetroNor on the basis of a 55percent and 45percent shareholding respectively.
The contract established a board consisting of five directors with two nominated by each of YFP and PetroNor and one independent director and one of YFP’s nominated directors will be the Chairman.
Jens Pace, Chief Executive Officer of PetroNor said the agreement with YFP is a key step in establishing a means to create partner alignment around PetroNor proposed concepts for the future development of the Aje Field.
“Following government approvals, the Company will advance plans for increasing liquids production, and developing the discovered gas resources,” Pace said in a statement.
The Aje oil and gas field began producing in May 2016 with oil processed and exported from a leased FPSO, the Front Puffin. It has produced a cumulative of 3.6 million barrels of oil and condensate as of August 1, 2019.
Aje has multiple oil, gas and gas condensate reservoirs in the Turonian, Cenomanian and Albian sandstones with five wells drilled to date. It currently has two producing wells, Aje-4 in the Cenomanian and Aje-5 in the Turonian both producing about 3000 bpd. The field’s proven reserves are 82.4 million barrels of oil equivalent, while proven, probable and possible reserves are estimated to be 220.8 million boe.
“We are very happy working with YFP and their advisor Redcliff Energy Advisors in the joint effort to finalise this agreement. We look forward to aligning with rest of the licence partners and the government of Nigeria for the future development of the Aje Field,” Eyas Alhomouz, Chairman of Petronor and incoming board member of Aje Petroleum said.
Knut Sovold, Chief Operating Officier of PetroNor and incoming Technical Manager for Aje Petroleum, said the fundamentals of the Aje Field have being very encouraging and “we are looking forward to working closely with our partners on the licence to review and approve these plans.”
The YFP agreement sets out the contribution by YFP and YFP Deep Water (YFP DW) of their shareholding in the companies holding the YFP and YFP DW participating and economic interest in OML 113 to the partnership and the SPV.
Similarly, PetroNor will contribute its shareholding in companies holding its participating and economic interest in OML 113, which is being acquired from Panoro Energy.
Following completion, Aje Petroleum will hold a 75.5percent participating interest and an average economic interest in the order of 38.7percent in OML 113, with an initial 29percent economic interest at the onset of the transaction.
The Aje field was discovered in 1997 and is 24 kilometres offshore Nigeria located on oil mining lease (OML) 113 in water depths of about 1,476 ft.
Aje field is reputed as the first and only oilfield in Nigeria where exploration and appraisal activities have been undertaken solely by indigenous Nigerian companies without the direct involvement of an international oil company (IOC).