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SEPLAT Petroleum Development Company, a leading Nigerian indigenous oil and gas company listed on both the Nigeria Stock Exchange and London Stock Exchange, has completed the acquisition of a 40% working interest in OML 53, onshore north eastern Niger Delta from Chevron Nigeria Limited (‘CNL’). NNPC holds the remaining 60% interest in OML 53.
The up-front acquisition cost to SEPLAT, after adjustments, is US$254.6 million, of which US$69.0 million had previously been paid as a deposit in 2013 and US$185.6 million paid at completion. The adjustments to the up-front acquisition cost include a deferred payment of US$18.75 million contingent on oil prices averaging US$90/bbl or above for 12 consecutive months over the next five years.
The Company estimates net recoverable hydrocarbon volumes attributable to its 40.00% working interest to be approximately 51 MMbbls of oil and condensate and 611 Bscf of gas (total 151 MMboe). SEPLAT has been designated as Operator of OML 53 pursuant to the Joint Operating Model approved by the Honourable Nigerian Minister of Petroleum Resources.
‘In particular, this transaction fits neatly with our strategy of securing, commercializing and monetizing natural gas in the Niger Delta with a view to supplying the rapidly growing and evolving domestic market. In addition to the large scale discovered, but undeveloped gas and condensate resources that are yet to be fully classified through detailed technical work, there are near term opportunities to increase and optimize oil production significantly above current levels,’ said Austin Avuru, SEPLAT’s Chief Executive Officer.
‘We very much look forward to working with NNPC and leveraging our technical and commercial expertise as Operator to realize the full potential of this high grade acreage,’ he added.
OML 53 covers an area of approx. 1,585km2 and is located onshore in the north eastern Niger Delta. The Jisike oil field, located in the north western area of the block, is currently the only producing field on OML 53. Current gross production from Jisike is approx. 2,000 bopd (approx. 800 bopd on a 40.00% working interest basis). Existing infrastructure on OML 53 at Jisike comprises flow-lines, phase one separation facilities and a flow station with a design capacity of 12,000 bopd and 8 MMscfd. Oil production is then sent for further processing at the nearby Izombe facilities on OML 124 from where it is then exported via pipeline to the Brass oil terminal.
The block also contains the large undeveloped Ohaji South gas and condensate field, the development of which will be coordinated with the SPDC operated Assa North field on adjacent OML 21, together referred to as the ANOS project.
The expectation is that future gas production from the ANOS project will supply the domestic market, for which significant work on commercialization terms and development concepts has been undertaken, and that produced condensate will be available for sale into the global market. There is also shallow oil development potential at Ohaji South that could be pursued as a separate, standalone project in the near term.
Prior to initiating development of the ANOS project, SEPLAT expects to focus efforts on increasing oil production at the Jisike field and development of the shallow oil reservoirs in Ohaji South.