Vaalco Energy has signed a purchase and sale agreement to acquire an additional 3.23% participating interest in the Etame Marin Permit, located offshore Gabon.
The company bought the interest from Sojitz Etame Limited, which represents the full interest owned by Sojitz in the concession. The transaction has an effective date of August 1, 2016.
Vaalco is the operator of and, prior to the acquisition, owned a 30.35% participating interest (28.1% working interest) in the fields in the Etame Marin block which encompasses approximately 28,700 gross acres in shallow water.
There are four production platforms and nine wells currently producing in the concession, including three subsea well tiebacks. Production from the fields averaged about 19,000 barrels of oil per day in the second quarter of 2016 and over 93 million barrels of oil have been produced since production started in 2002. This acquisition is expected to boost Vaalco’s net production by nearly 11%, effective as of August 1, 2016.
According to Vaalco, the transaction is expected to close within 90 days, subject to customary closing conditions.
The company said it intends to fund the acquisition with the additional $5 million loan capacity available under the new term loan agreement announced in early July with the International Finance Corporation (IFC), subject to their approval, and with cash on hand.
Steve Guidry, Vaalco’s Chief Executive Officer commented, “We are very pleased to increase our participating interest in our flagship producing asset in offshore Gabon to 33.58%. VAALCO, operator of the Etame Marin block, drilled the first discovery in the field in 1997, so our technical team knows the area extremely well.
“We believe it has significant upside potential remaining. We have identified at least 17 future drilling opportunities we can pursue when prices recover that we estimate could include about 65 million barrels of gross unrisked recoverable contingent resources.”