Sep 11 - Agreement to Acquire Interest in Offshore West African Oil Field

Source Press Release
Company Jacka Resources LimitedProvidence Resources PLC 
Tags Deals, Upstream Activities
Date September 28, 2011
  • Jacka Resources enters into  an agreement to acquire a direct interest in an oil and gas development project located in the West African Transform Margin
  • The Aje field has been deemed commercial by the Joint Venture
  • Jacka estimates resources of circa 10 million barrels of oil equivalent net to the Company
  • Substantial upside from further exploration/tieback potential within the project area
  • Quality partners with proven regional experience and close proximity to commercialisation infrastructure 

Providence Resources has entered into a Heads of Agreement to divest its Nigerian subsidiary, which holds its interest in OML 113, to Jacka Resources , an ASX-listed company, for a consideration of $16.0 million. Jacka has agreed to acquire a direct equity interest in the Aje oil and gas field located in OML 113 in the West African Transform Margin in Nigeria.

Four wells have been drilled on the Aje field, all of which encountered hydrocarbons, with logging and testing demonstrating significant net hydrocarbon-bearing sections in three of the wells. Following the successful drilling and flow testing of Aje-4, the partners deemed the Aje field commercial. Jacka's technical review estimates that the acquisition will deliver net P50 contingent resources of circa 10 million barrels of oil equivalent to the Company. Upon closing of the transaction which is scheduled for 15 November 2011, Jacka will have a net 5% revenue earning interest in the Aje field (paying 6.675% of the costs relating to the Aje development).

In consideration for the acquisition Jacka will pay the following:

  • A deposit of US$1 million (which has been paid) to secure exclusivity over the transaction
  • Tranche 1 payment of US$9 million payable on 15 November 2011
  • Tranche 2 payment of US$6 million payable on 30 April 2012 

Jacka and Providence have negotiated a formal Sale & Purchase agreement which is expected to be executed before the end of October. The transaction is conditional upon waiver of JV pre-emptive rights and the receipt of all necessary corporate, shareholder and regulatory approvals. Upon satisfaction of these conditions the acquisition is due to complete on 15 November 2011.

As part of the transaction, Jacka will also acquire a 2.667% interest in the OML 113 licence and will join the JV consisting of YPF (Operator), Chevron (Technical Advisor), Vitol and Panoro Energy.

The West African Transform Margin (WATM) region has become an industry hot spot in recent years following the discovery of the billion-barrel-plus Jubilee field and other oil fields in Ghana and neighbouring countries. The WATM is now attracting some of the biggest players in the oil industry, including ExxonMobil, BP, Anadarko, CNOOC, VitolTullow Oil, Chevron, EniRepsol, and many others.

The OML 113 licence contains a number of leads and prospects which are mapped on trend with proven accumulations, providing further exploration upside and possible tie-back opportunities. Geophysical data coverage over OML 113 includes 915 kms of 2D seismic, 700 sq kms of 3D seismic (including full 3D cover of the Aje field) and an electromagnetic survey.

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd