All articles in the Farm in, Farm Out Section:

TGS and PGS, two leading geophysical and data storage companies, headquartered in Norway, are combining to create “a stronger and more diversified geophysical company and data provider to the energy value chain, driven by technology and innovation”, a statement by TGS says.

The transaction is expected to be completed as a statutory merger pursuant to Norwegian corporate law, with merger consideration to PGS shareholders in the form of 0.06829 ordinary shares of TGS for each PGS share.

Following the completion of the transaction, TGS and PGS shareholders will own approximately 2/3 and 1/3 of the combined company, respectively, on the basis of the share capital of each of the companies as of 15 September 2023.

“The transaction establishes the combined company as a full-service geophysical data company with a strong offering in all segments, including Multi-Client data, streamer data acquisition, Ocean Bottom Node (‘OBN’) data acquisition, imaging and new energy data. Moreover, the transaction helps mitigate supply chain risks and will add further to economies of scale and efficiency, enhancing the value offered to clients”, TGS explains, adding: “preliminary estimate of more than $50Million annually in cost synergies

The transaction is supported by the Board of Directors of both companies. Kristian Johansen and Sven Børre Larsen will continue as CEO and CFO post transaction.

Definitive merger agreements are expected to be entered into in October 2023, with closing of the transaction expected during the first half of 2024, subject to satisfaction of conditions for completion.

In Multi-Client, the combined company will offer customers a global seismic library with data from all active basins in both the western and eastern hemispheres. In data acquisition, the combined company will be a substantial player globally with a strong operational track record. For streamer acquisition, it will hold an operational fleet of seven 3D data acquisition vessels, and for Ocean Bottom Node (OBN) acquisition, the combined company will benefit from around 30,000 mid and deepwater nodes. Within imaging, the combined company will offer a strong service to in-house and external customers integrating on-premises and cloud based high-performing computing services. In addition, the combined company sees significant growth opportunities in new energy with complementary technology offerings for Carbon Capture and Storage (CCS) and offshore wind.

“The seismic industry is changing whereby production seismic is becoming increasingly important alongside the traditional exploration seismic. By combining TGS and PGS’ complementary resources, we create a fully integrated geophysical service provider well positioned to generate significant value for all stakeholders” stated Rune Olav Pedersen, President & Chief Executive Officer of PGS.

“This is a strategic transaction for TGS and a major step on the journey we started in 2019. It will combine the capabilities of both companies to create a geophysical powerhouse. The transaction continues TGS’ strategic development from a pure Multi-Client seismic company to the leading acquirer and provider of geophysical data to both the oil and gas and new energy industries” stated Chris Finlayson, Chair of the Board of TGS.

Financing:

The combined company will have a combined fully diluted market cap of approx. $2,616Million and a net interest-bearing debt (NIBD) of U$649Million (2Q 2023), corresponding to a market cap:NIBD ratio of 80:20. The combined company will seek to optimize its capital structure, efficiency and cost based on the strength of the combined balance sheets and cash flows. As such, the combined company plans to refinance PGS’ $450Million senior notes and the term loans on first call opportunity. As an overriding principle, TGS will continue to maintain a conservative balance sheet profile.

Key terms of the merger:

Based on a TGS share price as of close 15 September 2023 of NOK 147.50, the exchange ratio of 0.06829 and 925,321,732 fully diluted PGS shares, the equity value of PGS is NOK 9,321Million, corresponding to a price per share of NOK 10.073. This represents a premium, of 20.7% to PGS closing price on 15 September 2023 and an exchange ratio premium of 22.4%, 40.8% and 41.6% based on 30 days, 3 month and six months VWAP as of 15 September 2023, respectively.

Future TGS dividend payments up to closing will be compensated to PGS shareholders. The full merger plan is expected to be published during October 2023.

The transaction remains subject to certain conditions, including a confirmatory due diligence by both parties, finalizing and executing a definitive merger plan, as well as customary closing conditions such as relevant regulatory approvals and consents and expiry of statutory waiting periods and no material adverse change occurring. The transaction is also subject to approval by extraordinary general meetings in both TGS and PGS with at least two-thirds majority. Closing of the transaction would occur as soon as possible thereafter.

The British minnow, SDX Energy, is close to selling its Egyptian assets, as part of a transition roadmap to “monetize exciting opportunities around its Moroccan assets and related energy transition sector-plays”, the company has said.

SDX ‘s Egyptian portfolio contains interests in six concessions in Egypt and Morocco. In Egypt, the Company has a working interest in two producing assets, such as a 55% operated interest in the South Disouq concession in the Nile Delta and a 50% non-operated interest in the West Gharib concession located onshore in the Eastern Desert adjacent to the Gulf of Suez.

In Morocco, the company  has a 75% operated working interest in four exploration permits, all situated in the Gharb Basin, which includes the Sebou Central, Gharb Occidental, Moulay Bouchta Ouest, and Lalla Mimouna Sud exploration permits, plus a number of exploitation concessions containing the producing wells.

SDX says it has entered into a non-binding Heads of Terms with a large multinational operator to divest of all of its Egyptian assets in a move to optimize its asset portfolio and focus on the Moroccan energy transition sector. The company expects to close the transaction by the end of 2023.

SDX states that the “Disposal will position the company for upcoming diversification into Morocco’s energy transition sector. Moving towards the energy transition narrative also gives access to a wider pool of capital, setting SDX on a new path of growth with the ultimate aim of delivering sustainable returns for shareholders.”

The Disposal will require the consent of SDX shareholders being given in a general meeting. Completion of the Disposal will be subject to, among other conditions, the negotiation of final transaction documentation and obtaining Egyptian government approvals for the sale. The Heads of Terms are non-binding and, therefore there can be no certainty that the Disposal will complete, SDX states.

Once the sale goes through, “SDX, re-energized with new management, will focus on monetizing exciting opportunities around its Moroccan assets and related energy transition sector-plays”, says Daniel Gould, Managing Director. This is “in oder to reward and deliver capital growth to our shareholders in the near term.”

Mozambican authorities are finalising negotiations with the two consortia that won the 6th international tender (bid round) for hydrocarbon exploration and production.

“Negotiations are almost over and by the end of this year at the latest the contracts will be presented to the government so that it can approve them and start operations,” said Carlos Zacarias, the country’s Minister of Mineral Resources and Energy.

The two consortia who won were led by ENI, the Italian explorer and China National Offshore Oil Corporation (CNOOC), the Chinese behemoth.

Zacarias explained that the Mozambican cabinet is studying the possibility of launching more bid rounds in the short term, as the government considers the country as having significant volume of yet unexplored hydrocarbons.

The minister was speaking at the closing ceremony of the 8th Coordinating Council of the Ministry of Mineral Resources and Energy.

“Taking advantage of the energy resources that Mozambique has, becomes more pertinent given the period of energy transition that the world is going through,” he emphasised.

Mozambique has three development projects approved to exploit the natural gas reserves in the Rovuma basin, considered one of the largest in the world and are located off the coast of Cabo Delgado province.

By Macson Obojemuinmoin

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) may be keeping to the reviewed terminal date for the seven deepwater acreages on offer since January 2023.

The commission, on April 1 2023, revised the Deep Offshore Oil Block Bid Round Schedule by extending the deadline for the submission of Technical/Commercial bids to May 19, 2023, with timeline for concluding activities of contract negotiations and signing between July 3 and 28, 2023.

“The outstanding activities for the conclusion of the exercise include the Technical/Commercial Bid Submission and the Ministerial Consent/Contract Negotiation and Signing”, Gbenga Komolafe, Chief Executive of the NUPRC said.

Mr. Komolafe said that constant interrogation and oversight of the process revealed two concerns the plan to conclude the bid process before transition to the new government and the need to guarantee participation of qualified indigenous companies, working collaboratively with multinationals and the International Oil Companies (IOCs) to leverage technology, funding and expertise”

Shell plc, TOTALEnergies, ENI of Italy and Chevron were part of the early contestants for the acreages, located in ultradeepwater Benin (Dahomey) Basin. They were prequalified. But the majors have struggled to remain in the contest, whereas Nigerian owned companies have been more eager.

The seven open blocks: 300-DO, 301-DO, 302-DO, 303-DO, 304-DO, 305-DO & 306-DO) are mostly located in ultradeep waster, with water depth ranging from 1,1000 to 3,000Metres.

Several downstream (petroleum product marketing) Nigerian owned companies, including Masters Energy, Matrix Energy, A. Y. M. Shafa, MRS Oil & Gas, as well as Sifax & Royalgate as a consortium, were prequalified.

Originally conspicuous in their absence from the bid were Nigeria’s producing indigenous independent E&P companies; those who are currently producing crude oil and gas in the country’s onshore and shallow water assets. The exception to the rule is the Sahara Group.

The Angolan National Agency of Petroleum, Gas and Biofuels (ANPG) has presented the outlines and scope of its Petroleum Concessions-2023, for the exploration and production of petroleum, of 12 blocks, in the onshore parts of the Congo and Kwanza Basins.

The agency will announce the public tender for the award of the 12 oil blocks on September 30 of 2023, with the signing of the Basins assignment, scheduled for March 19, 2024.

ANPG is working to meet the target, set by r the government in 2019, to offer around 55 blocks by 2025. The Petroleum Concessions-2023 represents a segment of this objective.

“The two basins have great production potential and a proven history of oil activity”, Paulino Jerónimo, chairman of the ANPG’s Board of Directors at the presentation, which was attended by a hall full of petroleum industry professionals. “The ANPG is committed to maintaining an open dialogue with its partners so that together we can find the best solutions with a view to the continuous improvement of the sector and make Angola a a privileged location for investors in the oil sector in Africa and the world”, he noted. It should be remembered that the National Agency of Petroleum, Gas and Biofuels (ANPG) has already carried out three tenders, in 2019, 2020 and 2021”.

ANPG managers gave various presentations at the roadshow in Luanda, to highlight the value of the assets on offer. One presentation was titled: “Technical assessments of blocks and existing data packages“, Another was “Accessibility studies and environmental legislation”, There was “Legal, fiscal and contractual framework” as well as “Commercial terms requirements”.

There were presentations focused on “Logistical conditions and opportunities for regional development and promotion of Local Content” and “Requirements for attributing the quality of associate of the National Concessionaire“.

ANPG announced that Blocks CON 1, CON 3, CON 7 and CON 8 in the Onshore Congo Basin, have produced, as high as 50,000 barrels of oil/day in the 1970s and early 1980s. It is hoping that, with new  money invested by would-be  acreage holders, the assets could still do as much as 80,000 BOPD.

The tender for the Congo and Kwanza Onshore Basins is based on Presidential Decree No. 52/19, which establishes rules aimed at increasing oil and gas production in Angola, as well as ensuring the decline of crude oil in the country.

The ANPG says that its database contains an enormous amount of geophysical, geological, geospatial information that can serve as support for the evaluation of the basins. Naire Quenge of the ANPG Archive Office, notes that the Kwanza Basin has an area of ​​approximately 25 thousand square kilometers, consisting of 23 blocks, whose exploration history comprises two phases, the first dating from 1910 to 1925, when a total of 26 wells were drilled.

From 1925 to the present date, several two dimensional (2D) seismic campaigns, aeromagnetometric surveys, a total of 300 wells drilled, between exploration and production, culminating in the discovery of 11 oil fields and two gases.

“Studies of geological cacography and geochemical evaluation made it possible to recognize two mega frequencies in the Kwanza basin, which are: the pre-salt and post-salt unit. In the pre-salt there are, structurally, normal faults eradicated in the leak that originated structures of the horsts and grabens type (structural ups and downs)”, Quenge explains, stressing: “In the structural lows are deposited fine material rich in organic matter that constitutes the main rock of the referred unit, which is the red cube formation, responsible for feeding the sandstones deposited on the flanks of the horsts in the form of a pinchout, also responsible by feeding Coquina-type carbonates from the top of the horsts, equivalent to the Lower Congo Toca formation.

“At the top of the sequence, a Sag-type basin was formed, in which there are sands as reservoirs equivalent to the Chela formation of the lower Congo and at the top of the sequence the microbiological limestones that are reservoirs and as source rock, we have the formation of the cube grey. This unit culminates with the deposition of massive salt formation”.