Vaalco Energy Inc. agreed to acquire a 27.8% working interest in the Etame Marin block and 40% in Block DE-8, offshore Gabon, from Sasol Gabon SA for $44 million plus future contingent payments of up to $6 million.
Block DE-8 is in shallow waters and encompasses multiple producing fields, some of which are not part of the transaction and are carved out of the contract area that VAALCO is acquiring. The agreement includes an interest in the 2003 Akoum-B discovery. A potential appraisal well is planned for 2021. If successful, it could be tied back through a subsea completion to an existing Perenco-operated platform on Block DE-8.
Based on currently monthly production, the acquisitions will almost double Vaalco’s net revenue interest production to 9,150 b/d from 4,850 b/d. Year-end 2019 SEC reserves will increase to 9.4 million bbl from 5.0 million, and year-end 2019 independent 2P CPR reserves will increase to 17.5 million bbl from 9.2 million bbl.
The deal is expected to close within 90 days with an effective date of transaction of July 1.
VAALCO currently owns and operates a 31.1% working interest in Etame. The transaction will increase VAALCO’s total working interest to 58.8%. Perenco is operator at DE-8 (60%). VAALCO will own the remaining 40%.