MedcoEnergi has entered into an agreement, effective 1 January 2014, to acquire 100% of the shares of Storm Ventures International (Barbados) Ltd. (“SVI”) from Storm Ventures International (BVI) Ltd. (the “Seller”) for a base purchase price of US$ 114.03 million, excluding an amount payable for working capital (which is subject to a customary post-closing adjustment).
The Seller is a subsidiary of Chinook Energy Inc., which is listed on the Toronto Stock Exchange. SVI (together with its subsidiaries) is one of the leading active exploration and production companies in Tunisia, with a participating interest in eight working areas. SVI’s interest in Tunisia comprises four exploration areas, two development areas and two production areas with concession periods of either 30 or 50 years. Out of these eight areas, five are located onshore and three are offshore.
All of SVI’s blocks are located in prolific hydrocarbon areas. Five onshore blocks (Adam, Sud Remada, Bir Ben Tartar, Jenein and Borj El Khadra) are located in the Ghadames Basin (the same basin as the Company’s Libya Area 47 is located and where large oil and gas reserves have been discovered with a 90% exploration success rate), while the remaining three offshore blocks (Cosmos, Hammamet and Yasmin) are located in the Pelagian Basin off the northeast coast of Tunisia.
The completion of this acquisition is conditional upon, amongst other things, approval from the Government of Tunisia and the consent of certain existing partners’ in the blocks. Upon completion of the acquisition, MedcoEnergi anticipates adding 2P reserves and oil-and-gas production (net working interest before royalties, taxes and Government take) by 12.3 MMBOE and 2,800 BOEPD, respectively.
Production is envisaged to increase to approximately 16,000 BOEPD from in-fill well drilling of the existing producing block (Bir Ben Tartar) and the development of the Cosmos and Yasmin blocks (scheduled for completion in 2018) is expected to add a further 12.6 MMBOE of 2P reserves.
Lukman Mahfoedz, President Director & CEO of MedcoEnergi, said: “I am pleased with this acquisition as it will strengthen and expand our global presence, particularly in MENA countries. Furthermore, this acquisition will support the Company’s growth agenda through the development of new oil and gas blocks”. Lukman added: “We have recently met with the Government of Tunisia and they have shown their strong support in welcoming us back to Tunisia to pursue oil and gas E&P opportunities.”