Highlights of the agreement
- ADM will acquire 25% of the interests, rights and obligations held by EER in the Block subject to conditions.
- On completion, ADM's participating interest will increase to approximately 4.9%.
- Corresponding revenue and cost bearing interests increasing to 9.2% and 12.3% respectively.
- Upon completion, ADM's net 2P reserves will increase from 8.9 million boe (as announced on 2 May 2019) to 16.4 million boe.
- Post completion, net daily production is expected to increase to approximately 273 bpd from 148 bpd.
OML 113 covers an area of 858 km² in the western Nigeria offshore Dahomey basin, some 24 km south of the coast and 64 km from Lagos, in water depths ranging from 100 to 1000 m. The West African Gas Pipeline (WAGP) intersects the northwest part of the licence. There are currently five partners in the licence: Yinka Folawiyo Petroleum Company Limited, New Age Exploration Nigeria Limited, Pan Petroleum Aje Limited, EER and ADM.
Osamede Okhomina, CEO of ADM, said: "In keeping with our strategic development agenda, I am pleased to announce our first investment under the Company's new leadership. OML 113 is well known to us and it is a fantastic asset that covers the spectrum of field types from current oil production to several appraisal plays. It is also very wet-gas rich which provides the potential for the operator to be able to bring into the market, alongside dry gas, resources like condensate and LPG.
"As envisaged under the intended Strategic Alliance signed earlier this month, we have proposed this project as one Trafigura may consider investing in. We look forward to updating the market further in due course."
Yinka Ogundare, CEO of EER, commented: "We are very pleased with this transaction that was structured to help further consolidate our working relationship with ADM. The transaction would result in deepening our collaborative relationship and help the partners and the operator develop the asset further."
Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/24022020/adm-increases-stake-in-oml-licence-offshore-nigeria/