Seplat Energy set to acquire Mobil Producing Nigeria for $1.2bn

Nigeria’s leading energy supplier, Seplat Energy Plc, has entered into an agreement to acquire the entire share capital of Mobil Producing Nigeria Unlimited (“MPNU”) from Exxon Mobil Corporation, Delaware.

Managing Director of the company, Roger Brown, while making the announcement on Friday, pointed out that the 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.

In his words: “This transaction underpins Seplat Energy’s drive to be a leader in the growth of the indigenous independent energy sector in Nigeria.”

The Nigerian energy company, listed on the Nigerian Exchange and the London Stock Exchange, noted that the completion of the transaction was still subject to Ministerial Consent and other required regulatory approvals.

Under the terms of the transaction, Seplat Energy Offshore Limited, a wholly-owned Nigerian subsidiary of Seplat Energy Plc, has entered into a Sale and Purchase Agreement to acquire the entire share capital of MPNU for a purchase price of $1. 283 million-plus up to $300 million contingent consideration, subject to the lockbox, working capital and other adjustments at closing relative to the effective date.

The transaction encompasses the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria, which is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations, producing 95 kboepd (W.I.) in 2020 (92% liquids).

Based on 2020 pro forma working interest volumes for Seplat Energy and MPNU, the transaction delivers 186 percent increase in production from 51 kboepd to 146 kboepd o 170 percent increase in 2P liquids reserves, from 241 MMbbl to 650 MMbbl 14 percent increase in 2P gas reserves from 1,501 Bscf to 1,712 Bscf, plus the significant undeveloped gas potential of 2,910 Bscf (JV: 7,275 Bscf).

This acquisition will accelerate our development of Nigeria’s gas resources

The deal will also create 89 percent increase in total 2P reserves from 499 MMboe to 945 MMboe, Including offshore fields with dedicated, MPNU-operated export routes offering enhanced security and reliability.

The company said the transaction supports Nigeria’s energy transition and objectives of the Petroleum Industry Act, as it is the first transaction to be announced since the Federal Government’s ratified Petroleum Industry Act (“PIA”), and supports its key objectives.

Brown said Seplat Energy is fully committed to working with the Nigerian Government to bring these strategically important national assets fully into Nigerian ownership alongside NNPC Development of MPNU’s gas resources will support the Federal Government’s objective to achieve a pragmatic, progressive and just energy transition for Nigeria.

Commenting on the acquisition, Chairman of Seplat Energy, Dr. Bryant Orjiako, said: “This is a transformational acquisition for Seplat Energy that strengthens our partnership with the national oil company, the NNPC, and consummates the spirit of the newly enacted PIA.

“As a significantly larger business, with a stronger resource base and greatly enhanced capabilities, we will be better positioned to provide sustainable energy solutions that drive growth and profitability for the benefit of all our stakeholders, particularly our host communities and the wider Nigerian economy.

“We fully support the aims of the Federal Government’s decade of gas, and this acquisition will accelerate our development of Nigeria’s gas resources to help achieve a just transition for our rapidly growing country.”