Home Listing rules Nigeria: 12 things to know about Seplat’s $1.3 billion deal to take over Mobil Nigeria

Nigeria: 12 things to know about Seplat’s $1.3 billion deal to take over Mobil Nigeria

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The agreement will increase Seplat’s production to 146,000 barrels of oil equivalent per day from 51,000.

Seplat Energy, the largest listed oil and gas company in Nigeria, agreed to buy the shallow water business of Exxon Mobil’s Nigerian subsidiary known as Mobil Producing Nigeria Unlimited (MPNU) for approximately $1.3 billion.

This is the latest of similar deals involving multinationals like Shell and Exxon offloading its onshore and shallow water assets in Nigeria to local companies, preferably for deep water fields, after years of pollution and community issues, and in an effort to embrace cleaner energy.

Here are 12 quick things to know about the deal:

1. The agreement could reach 1.6 billion dollars on the assumption that 300 million dollars could be added to the initial sum under certain conditions at the time of the conclusion of the transaction.

2. The contingent consideration of $300 million is payable between January 1 and December 31, 2026.

3. Exxon Mobil is not offloading all of its Nigerian assets, only its offshore operations into a joint venture held with NNPC, where it has a 40% stake. The company operates another unit in Nigeria called Esso Production Nigeria Limited, which focuses on deepwater activities. .

4. The proposed acquisition is the first of its kind since the Nigerian government signed the Petroleum Industry Act.

5. MPNU holds four oil mining leases comprising OMLs 67, 68, 70 and 104. It owns the Qua Iboe Terminal, one of the largest export facilities in Africa’s largest economy. It has a 51% interest in the Bonny River terminal and the natural gas liquids recovery plants at EAP and Oso. These will be taken over by Seplat.

6. MPNU will operate as an independent subsidiary of Seplat. But the latter, after obtaining regulatory approvals, will align MPNU with its overall strategic objectives and ESG objectives.

7. Seplat’s current cash resources and borrowings will partially fund the purchase, while a $550 million senior term loan facility and a $275 million junior draw down facility make up the balance.

8. A consortium of local and offshore lenders as well as commodity trading companies will finance the transaction.

9. Seplat, listed in both Lagos and London, will be mandated to submit a new request for admission to official listing on the London Stock Exchange when the transaction is consummated due to the nature of the reverse takeover transaction, according to UK Registration Rules.

ten . Seplat will pay $128 million according to the terms and conditions which will be returned to it in the event of termination of the contract by Seplat in certain circumstances.

11. The transaction takes effect on January 1, 2021 and will be finalized in the second half of this year.

12. The agreement will increase Seplat’s production to 146,000 barrels of oil equivalent per day from 51,000. It also includes significant undeveloped gas potential.