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Seplat Gets Buhari’s Approval to Conclude $1.283 billion Mobil Acquisition

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Seplat Energy Plc, has announced that it has received a letter from the Minister of State for Petroleum Resources that, President Muhammadu Buhari has approved that Ministerial Consent be granted to Seplat Energy Offshore Limited’s cash acquisition of the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) from its shareholders.

The said shareholders are Mobil Development Nigeria Inc (“MDNI”) and Mobil Exploration Nigeria Inc (“MENI”), being entities of Exxon Mobil Corporation registered in Delaware, USA (“ExxonMobil”).

As announced on 25 February 2022, Seplat Energy had agreed to acquire the entire share capital of MPNU for a purchase price of $1.283 billion plus up to $300 million contingent consideration.

The transformational 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.

The approval is given by His Excellency, President Muhammadu Buhari in his capacity as the Honourable Minister of Petroleum Resources (“HMPR”), with the granting of Ministerial Consent pursuant to the powers of the Minister under Paragraphs 14-16 of the First Schedule of the Petroleum Act, 1969.

A separate announcement from the State House was released earlier.

In the letter, the President as HMPR directed that the HMSPR shall convey Ministerial Consent to all relevant parties, including but not limited to the Nigerian Upstream Petroleum Regulatory Commission (“NUPRC”), the Nigerian National Petroleum Company Limited (“NNPC”), the ExxonMobil companies, the Federal Competition and Consumer Protection Commission (“FCCPC”), and Seplat Energy/Seplat Energy Offshore Limited.

The President further directed that the HMSPR shall ensure that the ExxonMobil/Seplat Energy operating entity (being MPNU) carries out operatorship of all the OMLs in the related shallow water assets to optimise production in support of Nigeria’s OPEC quota in the short term as well as ensure accelerated development and monetisation of the gas resources in the assets for the Nigerian economy.

“The Board and Management of Seplat Energy thank His Excellency, President Muhammadu Buhari, for the Ministerial Consent to this landmark acquisition of the entire share capital of MPNU,” Seplat Energy said.

The deal would deliver 186 per cent increase in production from 51,000 bpd to 146,000 bpd or 170 per cent increase in 2P liquids reserves, from 241 MMbbl to 650 MMbbl.

In addition, it was expected to deliver a 14 per cent 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)

Furthermore, it was expected to increase by 89 per cent, the total 2P reserves from 499 MMboe to 945 MMboe and includes offshore fields with dedicated, MPNU-operated export routes offering enhanced security and reliability.

In the oil industry, 2P reserves are the total of proven and probable reserves while probable reserves are less likely to be recovered than proven reserves.

The transaction agreement also includes potential additional contingent consideration of up to $300 million in total, payable over the period 1 January 2022 to 31 December 2026, and contingent upon average Brent crude oil prices exceeding $70 per barrel and subject to MPNU’s average working interest production exceeding 60 kboepd (JV: 150 kboepd).

The deal primarily comprises a 40 per cent operating ownership of four oil mining leases (OMLs 67, 68, 70, 104) and associated infrastructure with NNPC being owner of the rest 60 per cent.

It includes the Qua Iboe Terminal, one of Nigeria’s largest export facilities as well as a 51 per cent interest in Bonny River Terminal and Natural Gas Liquids Recovery Plants at EAP and Oso.

However, the contract does not include ExxonMobil’s deep-water assets in Nigeria.

Seplat Energy had earlier made a deposit of $128.3 million to Exxon Mobil Corporation, Delaware as part of the consideration to acquire the entire share capital of Mobil Producing Nigeria Unlimited.

Seplat a leading Nigerian energy company is listed on the Nigerian Exchange and the London Stock Exchange.

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