Panoro Energy ASA signed two separate agreements through which it agreed to acquire all of Tullow Oil PLC’s Equatorial Guinea assets, as well as the Dussafu asset in Gabon. Panoro will acquire a 14.25% working interest in Block G, offshore Equatorial Guinea, and a 10% additional working interest in Dussafu Marin permit offshore Gabon.
Assets
The assets comprise seven non-operated oil production fields within Panoro’s core area with combined additional net production of 6,900 b/d of oil (estimated 2021) and net 2P reserves of 25 million bbl.
Through the acquisitions, Panoro will increase its net interest in Dussafu to 17.5% from 7.5%. Dussafu is currently producing 15,000 b/d of oil (gross) from four wells at Tortue field, which is expected to increase to 20,000 bo/d during 2021 with the addition of two additional Tortue wells. Through the Hibiscus-Ruche development, production is expected to grow to 40,000 bo/d in 2023 with further growth potential from Hibiscus/Ruche phase 2.
A minimum of one Hibiscus structure exploration well is expected to be drilled in this year’s second quarter, with an optional well being considered for the third quarter.
A separate deal sees Panoro enter Trident Energy-operated Block G, offshore Equatorial Guinea, which comprises six producing offshore oil fields through the Ceiba and Okume Complex assets. Net production is currently 4,500 bo/d but could grow to 8,000 bo/d net in 2023-25 driven by facility upgrades, well workovers, perforation of behind pipe zones, and infill drilling, Panoro said in a Feb. 9 press release.
Ceiba field lies in 600-800 m of water on the slope of the southern Rio Muni basin some 35 km offshore. Oil production began in November 2000, with the field being developed in phases with production wells tied back to the Ceiba FPSO through a system of six subsea manifolds and flowlines. The produced liquids are processed on the Ceiba FPSO for export. The field has 16 active production wells and 10 water injectors. Up to the end of June 2020, the field had produced a total of 204 million bbl.
The Okume Complex consists of five separate oil fields, Okume, Ebano, Oveng, Akom North, and Elon. All are tied back to a central processing facility at an Elon platform. Processed oil is transported via a 25-km pipeline to the Ceiba FPSO for export. Okume Complex fields have 32 active production wells and 12 water injectors. Up to the end of June 2020, the Okume Complex fields have produced a total of 237 million bbl.
Consideration
Consideration for the deals include up to $105 million for the Equatorial Guinea transaction, up to $70 million for the Dussafu transaction, and a further $5 million consideration to be paid after both transactions have completed.
For the Equatorial Guinea assets, Panoro will pay $89 million upfront cash consideration subject to customary completion adjustments and contingent cash payments of up to $16 million linked to asset performance and oil price.
For the Dussafu asset, Panoro will pay $46 million upfront cash consideration subject to customary completion adjustments and contingent cash payments of up to $24 million linked to asset performance and oil price.
The Equatorial Guinea transaction is subject to Tullow shareholder approval. The Dussafu transaction is not. The transactions are not inter-conditional, but both are subject to Panoro shareholder approval of a $70 million equity private placement to partly finance the transactions, in addition to customary government and other approvals. The government of Equatorial Guinea has approved the Block G transaction. Completion of both deals and receipt of funds is expected in first-half 2021.
