Seplat Energy Acquires ExxonMobil Assets in Nigeria

SEPLAT Energy Plc, a Nigerian energy company, has entered into an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation.

The transaction, which is subject to ministerial consent and other required regulatory approvals, is a sale and purchase agreement to acquire the entire share capital of MPNU for a purchase price of $1.28 million, plus up to $300 million contingent consideration.

All of these are subject to lockbox, working capital and other adjustments, according to a regulatory filing by the oil firm to the Nigerian Exchange Group (NGX).

“Seplat Energy Offshore Limited, a wholly-owned Nigerian subsidiary of Seplat Energy Plc, has 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 Transaction encompasses the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria, which is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations, producing 95 kboepd (W.I.) in 2020 (92% liquids),” the statement read.

The firm, in its notice, explained that this transaction would bolster Seplat’s standing on the Nigerian and London stock exchanges, where it was currently listed.

Also, the transaction is the first to be announced since the Nigerian government’s recently ratified Petroleum Industry Act (PIA), supporting its key objectives, the statement revealed.

Reacting to the development, Chairman of Seplat Energy Ambrose Bryant Orjiako said the deal would help the development of Nigeria’s gas resources.

“This is a transformational acquisition for Seplat Energy that strengthens our partnership with the national oil company, the NNPC, and consummates the spirit of the newly enacted PIA.

“As a significantly larger business, with a stronger resource base and greatly enhanced capabilities, we will be better positioned to provide sustainable energy solutions that drive growth and profitability for the benefit of all our stakeholders, particularly our host communities and the wider Nigerian economy.

“We fully support the aims of the Federal Government’s ‘Decade of Gas’ and this acquisition will accelerate our development of Nigeria’s gas resources to help achieve a just transition for our rapidly growing country.”

Chief Executive Officer of Seplat Energy,Roger Brown said, “The acquisition is a perfect fit with our strategy to build a sustainable business and deliver energy transition in Nigeria. Our financial strength has enabled us to attract high quality local and international capital providers to fund this transaction without diluting our existing shareholders and reflects our deliberate approach to capital allocation.

“We are determined to drive our growth through the extensive low-cost and low-risk production opportunities it delivers in the near term, whilst also developing longer-term opportunities to monetise our significant gas resources through domestic and export opportunities. This is a win-win for both companies. Together, we will strengthen our focus on profitability and cash generation to reinvest in Nigeria’s energy development.

“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I look forward to welcoming them to the Seplat Energy family.”

MPNU holds four oil mining leases comprising OMLs 67, 68, 70 and 104. It is the owner of the Qua Iboe Terminal, one of the largest export facilities in Africa’s biggest economy. It holds a 51 per cent stake in Bonny River Terminal and Natural Gas Liquids Recovery Plants at EAP and Oso. These will be taken over by Seplat.

“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.”

Seplat said the deal will deliver 186 percent increase in production from 51000 bpd to 146000 bpd, 14 percent increase in 2P gas reserves from 1,501 Bscf to 1,712 Bscf, plus significant undeveloped gas potential of 2,910 Bscf (JV: 7,275 Bscf).

It added that it would increase production by 89 percent in total 2P reserves from 499 MMboe to 945 MMboe and includes offshore fields with dedicated, MPNU-operated export routes offering enhanced security and reliability.

Roger Brown, CEO of Seplat Energy, said: “This transaction underpins Seplat Energy’s drive to be a leader in the growth of the indigenous independent energy sector in Nigeria.”

“The acquisition is a perfect fit with our strategy to build a sustainable business and deliver energy transition in Nigeria. Our financial strength has enabled us to attract high quality local and international capital providers to fund this transaction without diluting our existing shareholders and reflects our deliberate approach to capital allocation.

“This is a win-win for both companies. Together, we will strengthen our focus on profitability and cash generation to reinvest in Nigeria’s energy development.

“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I look forward to welcoming them to the Seplat Energy family.”