MX Oil, an oil and gas investing company, has now agreed terms for the sale of its investment in the Aje field offshore Nigeria to GEC Petroleum Development Company Limited (GPDC).
GPDC is a Nigerian company actively exploring and developing oil and gas resources in the Niger Delta and Anambra basins.
GPDC operates two licences offshore (OPLs 2009 and 2010) and two licences onshore (OPLs 907 and 917), along with OML 149 in joint venture partnership with Eni/Nigerian AGIP and Seven Energy.
GPDC is the wholly owned exploration and production subsidiary of Global Energy Company Limited (GEC), an energy resources and infrastructure group focused on Africa.
MX announced it would sell its interest in the OML 113 licence offshore Nigeria, which includes the Aje Field, on February 2, 2016, but at the time, MX did not reveal the buyer.
Under the terms of this agreement, GPDC has the right to acquire the company’s indirect investment in the Aje Field for a total consideration of $18 million. Initially up to $3.5 million will be advanced to the company in three stages, with the first payment of $2 million expected on or around March 14, 2016. These funds will be used to finance the remaining cash calls expected to be required for the investment in order to bring the underlying asset into production, MX said.
GPDC will then have the right to acquire the investment, which is most likely to be when initial oil production starts. On exercise of this acquisition right, the company will receive one payment of $5.75 million and then a second payment of $5.75 million six months later. The balance of $3 million will then be paid in three annual $1 million instalments from the date of the exercise of the acquisition right, although these payments may be accelerated in the event that the oil price exceeds $45 per barrel for a three month period, the company explained.
MX Oil’s Chief Executive Officer Stefan Olivier said, “We are delighted that we have now been able to finalise agreement for the sale of our investment in the Aje Field with GPDC which already has substantial assets within the region. I look forward to updating the market as the sale progresses and the Aje Field nears production.”
GPDC’s Chairman/CEO Joe Obiago said, “We are very excited by this transaction. The Aje Field (and OML 113) is a strategic fit for GPDC as it adds 10mmboe 2P net reserves and helps diversify our asset portfolio into the resources rich Dahomey basin and the medium to long term gas supply play of Lagos and the West African corridor, which is an important hedge against volatile oil prices. The asset complements our existing portfolio of five prime assets at various stages of development and achieves our immediate corporate objective of first production milestone in 2016.”