Seplat buys ExxonMobil’s Nigerian shallow water assets for $1.2bn

Seplat Energy Plc, a leading Nigerian energy company listed on the Nigerian Exchange and the London Stock Exchange has bought the entire offshore shallow water business of ExxonMobil in Nigeria at the cost $1.2billion.

The completion of the transaction is subject to Ministerial Consent and other required regulatory approvals but the transaction took effect January 2022.

The company said it has entered into an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation,

The Transaction agreement also includes potential additional contingent consideration of up to $300 million in total, payable over the period 1 January 2022 to 31 December 2026, and contingent upon average Brent crude oil prices exceeding $70 per barrel and subject to MPNU’s average working interest production exceeding sixty thousand barrels per day (60kboepd) (joint venture -150 kboepd) in such calendar year.

Using its subsidiary, Seplat Energy Offshore Limited, Seplat entered into a Sale and Purchase Agreement to acquire the entire share capital of MPNU for a purchase price of $1,283 million plus up to $300 million contingent consideration, subject to lockbox, working capital and other adjustments at closing relative to the effective date, the company said.

The transaction encompasses established, high-quality operation with a highly skilled local operating team and a track record of safe operations, producing 95 kboepd in 2020.

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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

Based on 2020 working interest volumes for Seplat Energy and MPNU, the transaction delivers: 186 percent increase in production from 51 kboepd to 146 kboepd, 170 percent increase in 2P liquids reserves, from 241 MMbbl to 650 MMbbl , 14 percent increase in 2P gas reserves from 1,501 Bscf to 1,712 Bscf, including significant undeveloped gas potential of 2,910 Bscf (JV: 7,275 Bscf).

It will also add 89 percent increase in total 2P reserves from 499 MMboe to 945 MMboe1 and Includes offshore fields with dedicated, MPNU-operated export routes offering enhanced security and reliability.

The MPNU asset portfolio in Nigeria primarily consists of: 40 percent operating ownership of four oil mining leases (OMLs 67, 68, 70, 104) and associated infrastructure (NNPC is the 60 percent partner), the Qua Iboe Terminal, one of Nigeria’s largest export facilities and 51 percent interest in Bonny River Terminal and Natural Gas Liquids Recovery Plants at EAP and Oso

It does not include ExxonMobil’s deepwater assets in Nigeria.

MPNU will operate as a standalone subsidiary of Seplat Energy and upon closing and following receipt of requisite regulatory approvals, Seplat Energy will align MPNU with its overall strategic goals and ESG objectives, the company said.