All articles in the Farm in, Farm Out Section:

By Toyin Akinosho

Africa Oil Corp, which marketed Kenya’s opportunities to the world and brought in Tullow Oil, has elected to withdraw from the country’s only upstream development project.

The Canadian junior says it has submitted withdrawal notices to its joint venture partners on Blocks 10BB, 13T and 10BA in Kenya, to unconditionally and irrevocably, withdraw from the entirety of the joint operating agreements (JOAs) and Production Sharing Contracts (PSCs) for these concessions. The Company has concurrently submitted notices to Ministry of Energy and Petroleum, requesting the government’s consent to transfer all of its rights and obligations under the PSCs to its remaining joint venture partner.

Africa Oil Corp has determined that “the carrying value of the Kenya intangible exploration assets was written down to $58.6Million at December 31, 2022, and the Company intends to further impair this value to zero”.

“Our strategy has shifted to focus on production and high potential exploration opportunities”, declares Keith Hill, the company’s President and CEO. Those opportunities include “our Orange Basin portfolio where we are now appraising the exciting Venus discovery, offshore Namibia”.

The production opportunity refers to the company’s stake in Prime Energy, which receives dividends from proceeds in Agbami, Akpo and Egina fields in Nigeria.

Africa Oil Corp. came into the consciousness of the global oil and gas community in the late 2000s, when it was vigorously marketing the Kenyan and Ethiopian opportunities, distributing printed regional maps and seismic sections from tiny booths at conferences focused on African oil and gas. These were the years immediately after the commercial discovery of oil in Uganda.

One company which took more than a cursory glance at those maps was Tullow Oil, which went ahead to farm in to acreages held by Africa Oil, took charge as operator and proceeded on a seismic and drilling campaign. In March 2012, Tullow announced a commercial discovery at Ngamia -1, in Block 10BB, placing Kenya on the hydrocarbon map of the planet. The South Lokichar basin development grew on the back of the Ngamia-1 discovery and the string of finds that came after it.

The latest field development plan calls for seven fields to contribute to a 130,000Barrels of Oil Per Day central processing facility from which the crude is evacuated into a 20 inch, 823 kilometre long, heated pipeline, which ferries the commodity to the country’s port town of Mombassa on the edge of the Indian Ocean.

AOC says, in its release, that it is proud to have played a central role in discovering the oil fields in Kenya’s South Lokichar Basin.

“We continue to believe these discoveries will form the basis of a significant oil producing province in the coming years with strategic value for the country. We have also had the privilege of working with our host communities on our social-focused programs and we are grateful to them for welcoming us to their midst. We thank the government of Kenya, our host communities and our joint venture partners for their support over the years and we wish them the best in taking the project forward to the next stage.”

Savannah Energy Plc has sold a quarter of its 41% stake in Cameroon Oil Transportation Company S.A. (COTCo).

The British junior reports that its wholly owned subsidiary, Savannah Midstream Investment Limited (SMIL), has signed a Share Purchase Agreement (SPA) with the national oil company of Cameroon, Société Nationale Des Hydrocarbures (SNH), relating to the sale by SMIL and purchase by SNH of 10% of the issued share capital in Cameroon Oil Transportation Company S.A. (COTCo).

COTCo owns and operates the 903km Cameroon section of the Chad-Cameroon export pipeline, the Kome Kribi 1 floating storage and offloading facility and related infrastructure. The pipeline has a 250,000Barrels Per Day (BPD) nameplate capacity and is the only international export route for oil production in Chad. “During 2022, COTCo transported an average of 124,000BPD of crude oil valued at an estimated $4.6bBillon at the prevailing Brent crude oil prices”, Savannah declares in a press statement.

“In consideration for the sale of the Shares, SNH will pay a cash consideration of $44.9Million to SMIL”. Savnnah says in a release. The Consideration, when received, will be used by the Savannah group for part repayment of existing debt facilities.

“Completion of the transfer of the Shares from SMIL to SNH will result in SMIL shareholding in COTCo reducing from 41.06% to 31.06%. Completion shall occur upon satisfaction of certain conditions precedent related to amendments to the bylaws of COTCo and is expected to occur in H2 2023. SMIL will retain the right to the dividend attaching to the Shares until the date of payment of the Consideration.

“Pursuant to the terms of the SPA, SNH and SMIL have pledged, inter alia, their support of one another as shareholders in COTCo.”

Norwegian junior Panoro Energy has entered into a definitive agreement with Beender Tunisia Petroleum Limited to acquire the latter’s 40% shareholding in Sfax Petroleum Corporation (SPC) for a total consideration of approximately $18.2Million in a mix of cash and shares.

The total acquisition cost of $6 per 2P barrel.

The deal translates to an addition of almost 3Million barrels of oil of 2P reserves and net daily production of 800-900Barrels of Oil Per Day (BOPD). This increases Panoro’s full year 2023 production guidance to 9,500 to 11,500BOPD (from 9,000 to 11,000 BOPD), recognising approximately nine months of production from completion, and increases the 2023 peak target to in excess of 13,000BOPD (previously in excess of 12,500BOPD) around year end SPC, through its subsidiaries, indirectly owns a 49% interest in the producing TPS Assets which comprise five oil field concessions in the region of the city of Sfax, onshore and shallow water offshore Tunisia, including Cercina, Cercina Sud, Rhemoura, El Ain/Gremda and El Hajeb/Guebiba. SPC also holds 87.5% interest in the Sfax Offshore Exploration Permit (SOEP) offshore Tunisia.

Prior to the acquisition, Panoro’s effective ownership of SPC stood at 60% (29.4% interest in the TPS Assets and 52.5% interest in SOEP), which it acquired from OMV in 2018. Post the Acquisition Panoro’s ownership of SPC will increase to 100% (49% interest in the TPS Assets and 87.5% interest in SOEP) and SPC will be a fully owned subsidiary of Panoro.

Panoro says that the taking of Beender’s 40% ownership of SPC equates to a 19.6% interest in the producing TPS Assets and 35% interest in SOEP.

As part of the acquisition, Panoro has assumed approximately $ 4Million of Beender’s share of outstanding Tunisian loan facilities. Panoro has refinanced this Tunisian facility into its principle corporate facility, increasing total facility amounts by $9Million (separately Panoro has made Q1 loan repayments of $ 6Million). Panoro has then also assumed Beender’s share of cash and working capital equivalent to approximately $6.5Million.

The Consideration payable is inclusive of all working capital adjustments with completion expected in April 2023.

Balance sheet as of the completion date will include an additional 40% of asset and liabilities of SPC acquired at fair value and equally the results from the Tunisian operation will be consolidated at 100% Upfront consideration comprises $4.9Million cash and $ 8.3Million (“Share Consideration”) via the allotment and issue of 2,945,035 new Panoro shares at an issue price of NOK 29.18 per share (issue value NOK 85,936,092.12).  Half of the Share Consideration have an agreed lock-up period of six months form the issue date, whereas the remaining 50% are subject to a lock-up of 12 months.

Deferred consideration of  $ 5Million payable in cash by end 2023.

About The TPS Assets.

Italian explorer ENI is making progress as the sole developer of the massive Baleine discovery it made in Block CI-802 offshore Cote d’voire in 2021.

But the company is open to having a partner with good money to farm in and share the costs.

ENI has an 83% stake in Block CI-802, with state-hydrocarbon company Petroci, being carried with 10% equity.

The Italian giant has not openly declared the need for farminee, but the ultimate cost of the deepwater development at over $10Billion naturally calls for a well-heeled, get-along partner, even when the development is a multi-phased activity for which the funding is provided in bits.

ENI is fast tracking the development with first oil targeted for the second quarter of 2023. The first phase envisages a fast-track subsea tieback to the Firenze FPSO, which will produce from three subsea wells in 1200 metres of water, with oil exported by shuttle tanker and gas piped to thermal power stations in the Ivory Coast..

A full-field development will involve many more subsea wells probably tied back to a bigger production facility, perhaps a bigger FPSO or a shallow water fixed platform.

An appraisal cum exploration drilling was successfully delivered in August 2022, boosting reserves, according to the company, by 25% to 2.5Billion barrels of oil and 3.3Trillion cubic feet of gas. It is not clear if these are ultimately recoverable reserves or contingent resources.

A partner choosing to take a 40% equity in the project will be funding up to $5Billion of the project. Analysts put the cost per barrel at a low $4.2 and NPV10 at a $1.2Billion. The 40% farminee will be entitled to at least 300Million barrels of oil and 400Billion cubic feet of gas.

Italian major ENI has achieved the closing of its acquisition of BP business in Algeria, the company says in a release.

The transaction, the company explains, “has been approved by the competent national and antitrust authorities”.

The assets are the British explorer’s equity in the two gas-producing concessions “In Amenas” and “In Salah”, which are jointly operated with Sonatrach and Equinor.

The In Amenas Gas Project, commenced production in 2006, and by November 2021, had recovered 84.42% of its total recoverable reserves, with peak production in 2009, which was approximately 21.27 thousand Barrels Per Day (BPD) of crude oil and condensate, 870Million standard cubic feet per day (87 MMscf/d) of natural gas and 28,000BPD of natural gas liquids. The field, as of November 2021, was now expected to recover 159Million Barrels of Oil Equivalent (159MMBOE), comprised of 36.61MMbbls of crude oil & condensate, 466.32Bscf of natural gas reserves and 44MMbbls of natural gas liquid reserves.

The In Salah Complex conventional gas field, which commenced output in 2003,  recovered 49.15% of its total recoverable reserves, with peak production expected in 2023, according to market data published by Offshore technology website as of December 2021. The peak production will approximately 880MMscf/d of natural gas. Based on economic assumptions, production will continue until the field reaches its economic limit in 2062. The field currently accounts for approximately 4% of the country’s daily output.