“TPDC can purchase a 20% production interest in Mnazi Bay, increasing its ownership to 40% in the project. The joint operating agreement will be amended…”
The company says the deal strengthens its existing long-term partnership with the state hydrocarbon firm: Tanzania Petroleum Development Corporation (TPDC).
Mnazi Bay Complex is a conventional gas field, producing l103Million standard cubic feet per day of gas, (103MMscf/d) which satisfies about half of Tanzania’s domestic market. It is located onshore in the Mtwara region of Southern Tanzania, operated with 48.06% share by M&P Exploration and Production Tanzania Ltd.
Wentworth Resources, headquartered in the UK, is a partner in the project, with a 31.9% stake. TPDC holds the remaining 20%.
M& P’s agreement with TPDC is structured as a ‘call option’, which provides a pathway for TPDC to increase its ownership by up to 20% in the production interest (the Call Option) of the Mnazi Bay project.
“As part of this agreement, M&P has received the required pre-emption waiver from TPDC and Tanzanian government’s approval for the acquisition, and only the final consent from Tanzania’s Fair Competition Commission (FCC) remains outstanding, which is expected to be granted before the Jersey Court sanction hearing”, M&P says in a statement.
“As the acquisition is to be implemented by means of a scheme of arrangement pursuant to Article 125 of the Jersey Companies Law, and given the approvals received, Wentworth has made arrangements for the Jersey Court to consider and if, thought fit, sanction the Scheme at a court sanction hearing to be held on December 19, 2023.
Following this date, M&P will take ownership of Wentworth and acquire its 31.94% direct and indirect interest in Mnazi Bay.
Subsequent to the closing of the acquisition, M&P expects TPDC to execute the Call Option whereby TPDC can purchase a 20% production interest in Mnazi Bay. As a result, M&P will hold a 60% ownership and TPDC will hold a 40% ownership in Mnazi Bay. The joint operating agreement will be amended to reflect new partnership conditions, and will allow TPDC to appoint secondees to participate in the operations of the Mnazi Bay field.
The acquisition shall be funded by the £63Million placed in escrow as part of the acquisition announced on 5 December 2022. Upon execution of the Call Option, TPDC will contribute its share of the acquisition consideration, and Wentworth’s cash balance and corporate winding down costs will be shared between M&P and TPDC.