3rd Apr 2014 11:16
LONDON (Alliance News) - Genel Energy PLC Thursday said it, along with White Rose Energy Ventures, has agreed to acquire 15% working interests in each of Blocks 38 and 39 offshore Angola for a total of up to USD281 million.
The oil and gas exploration and production company, which has major assets in the Kurdistan region of Iraq, said the blocks are in the Kwanza Basin and cover an area of 14,000 square kilometres in water depths of 1,500 to 2,500 metres deep.
Genel said the interests will be acquired through two separate transactions by a joint venture equally owned by Genel and White Rose.
For the 15% working interest in Block 38, the companies will pay China Sonangol Group USD59 million, while the 15% share of Block 39 will be acquired from Statoil Angola Block 39 AS, a subsidiary of Statoil ASA, for a total value of USD222 million.
The company said that all payment for Block 39 would be paid by carrying Statoil's share of expenses on the block, with the carry on the first exploration well capped at USD123 million, and the remaining USD99 million carry paid in the event that the joint venture partners elect to participate in additional activity on the block.
Genel said it intends to pay for the acquisitions and drilling costs through existing cash balances, with completion subject to certain approvals.
The company said the acquisitions provide the company with a relatively low-risk, high impact near-term exploration opportunity which holds multi-billion barrels of prospectivity.
Genel Energy said the areas have been de-risked by previous exploration drilling in Angola, with a working hydrocarbon system directly adjacent to the blocks.
The company said a drillship has been contracted for a drilling programme on site, which is expected to start in the second quarter and firstly target the Dilolo prospect on Block 39.
"This transaction provides a rare opportunity to enter into a low risk, multi-billion barrel resource play," Tony Hayward, chief executive of Genel and former chief executive of BP PLC, said in a statement. "It fits with our stated strategy of securing high-quality exploration opportunities targeting very material resources, and further enhances the opportunity to add significant shareholder value through the drill bit in Africa."
Genel Energy shares were flat at 981.43 pence Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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