Afentra Announces Completion of INA Acquisition

Source Company Press Release
Company Afentra plc, INA Group, Sonangol
Tags Country: Angola, M&A: Corporate Deal, Deals, Upstream: Upstream News
Date May 10, 2023

Completion of INA Acquisition

Afentra has announced completion of the acquisition from INA-Industrija d.d. ('INA') of a 4% interest in Block 3/05 and 4% interest(1) in Block 3/05A offshore Angola (the 'INA Acquisition') pursuant to a sale and purchase agreement between INA and Afentra's wholly owned subsidiary, Afentra (Angola) Ltd, dated 18 July 2022 ('SPA'). This acquisition marks Afentra's entry into Angola where it is well positioned to build a material production business and contribute to a responsible energy transition for the country.

  • The transaction effective date of 30 September 2021 results in a net upfront consideration at completion of $17.0m, which is offset by the Company inheriting crude oil stock with an approximate value of $16.6m at $80/bbl (207,868 bbls(2))
  • The Company has also set aside $10.0m into an escrow deposit at completion, which will be paid to INA after the Block 3/05 licence extension is formally completed
  • The net upfront consideration and escrow deposit will be funded by $18.9m from the agreed Reserve Based Lending ('RBL') and working capital facilities and $8.1m from cash resources
  • The Company expects to sell its first cargo of crude oil in Q3 2023, thereby monetising the inherited crude oil stock and subsequent production
  • Block 3/05 current gross production in April averaged ~19,000 bbl/d (net 760 bbl/d)

The upfront consideration of $17.0m comprises a $12.0m initial consideration, $4.8m in working capital and interest(3) and $2.0m in payments of crystallised contingent consideration,(4) adjusted downwards by $1.8m due to positive net asset cashflows.(5)

The Company is pleased to announce that Mauritius Commercial Bank ('MCB') has entered both the RBL and working capital facilities as the lender to the Company. Trafigura retains an interest in the RBL facility and will continue as offtake provider for the Block 3/05 crude. The principal terms and conditions for both the RBL and working capital facility remain unchanged. The combination of MCB and  Trafigura is a further positive step as the Company strengthens its credit relationships with two lenders who are supportive of the energy sector.

Sonangol Acquisition Update

The Block 3/05 JV partners and ANPG, the Angolan Oil & Gas regulator, have now agreed the terms of the Block 3/05 licence extension, extending the production sharing agreement (‘PSA’) from 1 July 2025 to 31 December 2040 with improved fiscal terms that strengthen the economics of the permit. ANPG will now begin the process of obtaining the requisite governmental approvals for the licence extension. The agreement between ANPG and the JV partners of the terms for the licence extension, which is a Condition Precedent to the Sonangol acquisition, now allows  Sonangol, as seller, to start the process of obtaining the requisite government approvals for the Sonangol transaction where we remain on track to complete by 30 June 2023. The Company looks forward to providing shareholders with further updates in due course.

Source: EvaluateEnergy® ©2024 EvaluateEnergy Ltd