• Market Watch

Billion dollar oil deal concluded

• 2 Weeks Ago - 2024-11-05 00:00:00

On Friday, 1 November, Impact Oil and Gas announced in London, that the farm-out agreement with TotalEnergies has been given the green-light by the government of Namibia, and interests in Blocks 2912 and 2913B offshore Lüderitz have changed hands, with the associated cash payment of US$99 million (N$1,7 billion) received.
The farm-out agreement was initially announced on 10 January 2024, for the sale of a 9.39% undivided participating interest in Block 2912, and a 10.5% undivided participating interest in Block 2913B. The farm-out transaction further provides Impact with a carry-loan for all of its remaining development, appraisal and exploration costs on the blocks from January 1, until the date on which Impact receives the first sales proceeds from oil production. The carry-loan is repayable from a share of Impact’s after-tax cash flows, and net of all joint venture costs, including capital expenditures, from production on the blocks, the announcement elaborates. Following completion of this transaction, Impact holds a 9.5% interest in each of the two blocks.
Siraj Ahmed, Chief Executive Officer of Impact, said; “We are pleased to have received approval from the government of Namibia for our farm-out and look forward to continuing our journey towards first oil in Namibia. This is a transformational transaction for the company, securing Impact’s future participation in this exciting play. Additionally, this transaction, through the carry, gives Impact a funded exposure to further significant exploration opportunities in the blocks, starting with the recently spud Tamboti-1X well.”
The Deepsea Mira spudded the latest Tamboti-1X well on 20 October. According to Ahmed the drill rig is targeting significant additional resource in the north of Block 2913B. Beyond Tambotti-1X, there are a number of prospects in the southern part of the Blocks that are currently being matured by the recent 3D-seimic data and create an opportunity for follow-on potential high impact exploration wells, according to the announcement.
Also known as Petroleum Exploration Licence (PEL) 56, Block 2913B, is located offshore from southern Namibia and covers approximately 8 215km² in water depths between 2 450m and 3 250m. Impact entered the licence as Operator in 2014, acquiring 2D, then 3D seismic data which defined the Venus prospect. In 2017, Impact and NAMCOR were joined by TotalEnergies, bringing with it significant deep-water drilling expertise to the Joint Venture, and in 2019 Qatar Energy joined the joint venture.
Venus was a game-changing discovery announced in February 2022, which has led to significantly increased deep-seas oil exploration off the Namibian coast. Block 2913B contains the world class Venus light oil and associated gas field that was discovered by the Venus-1X well drilled in 2022. The field has been appraised with the testing of the Venus-1X side-track well plus three additional appraisal wells that have also been flow tested. These wells are: Venus-1A; Venus-2A; and Mangetti-1X.
PEL 91 in Block 2912 is adjacent and to the west of Block 2913B. It covers an area of approximately 7 884 km² in water depths between 3 000m and 3 950m. Following the completion of the Farm Down Impact now holds a 9.5% interest in this Block, while TotalEnergies, the operator, holds a 47.2% interest, Qatar Energy holds a 28.3% interest and NAMCOR holds a 15.0% interest.
Impact says that during 2024, two additional 3D seismic acquisition programmes were completed to facilitate further exploration over the southern and northern parts of its combined blocks. “This has resulted in most of the licenced area now being covered by 3D seismic. This data is currently being processed and interpreted and will help further evaluate prospects and leads in the far northern and southern parts of the blocks,” the announcement reads.
“We look forward to continuing our longstanding partnership with NAMCOR, TotalEnergies and Qatar Energy, and would like to thank the TotalEnergies team for their ongoing collaboration,” Ahmed said.
Impact is a UK-based, privately owned, independent exploration company with a focus on finding large scale, deep water plays offshore Western and Southern Africa. One of its major shareholders is Vancouver-listed Africa Oil Corp.
On Friday Roger Tucker, president and CEO of Africa Oil, said that the Venus development project is expected to add significant reserves and production to its portfolio. “We also believe there is tremendous exploration upside on the blocks starting with the recently spud Tamboti-1X well.” Africa Oil currently has a shareholding of approximately 32.4% in Impact. On the closing of the call and put option agreement with three Impact shareholders that was announced on August 27, 2024, the company will increase its shareholding in Impact to approximately 39.5%, which represents an effective economic interest of approximately 3.8% in the blocks, the investor announced.
Another major shareholder is Hosken Consolidated Investments, which voluntarily announced the conclusion of the farm-out to its shareholders yesterday (4 November,2024). Hosken Consolidated Investments Limited (HCI) is a black empowerment investment holding company which is listed in the “Diversified Financial Services” sector on the JSE Securities Exchange, South Africa. HCI’s major shareholder is the South African Clothing and Textile Workers Union.