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Midwestern Now In Definitive Agreement to Acquire Mart Resources

  • FBN Capital, Rand Merchant Bank, Ready to Finance Transaction
  • Expected Cash payment ~ $420Million (debt and equity)
  • Commitment Date remains May 15, 2015
  • Mart could accept a ‘superior’ proposal

Nigerian independent Midwestern Oil and Gas has entered into a “definitive arrangement agreement” (the“Arrangement Agreement”) with Mart Resources to acquire the latter.

“Pursuant to the Arrangement Agreement, a wholly-owned subsidiary of Midwestern will acquire all of the issued and outstanding common shares of Mart by way of a plan of arrangement under the Business Corporations Act (Alberta) (the“Arrangement”)”, Mart Resources said in a statement. This includes “the assumption of all outstanding bank debt of Mart (currently,approximately US$200 million), and each Mart shareholder will receive CDN$0.80 in exchange for each Mart common share held (the Cash Consideration)”.

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NDPR in Bed with the South Sudanese

By McJohn Adjoto, in Lagos

“Our Mission to East Africa Just Begins”-Fatona

Nigerian independent, Niger Delta Petroleum Resources(NDPR), has formed a joint venture with Nile Petroleum Corporation, the South Sudanese state hydrocarbon company.

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Algeria’s Revenue Plunges Deeper

Algeria earned $58.5billion from its exports of hydrocarbons in 2014, down from $63.8 billion in 2013, which itself was lower than $69.8 billion in 2012.

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South Africa Opens Door to Natural Gas Import

By Toyin Akinosho

Country will require over 2Bcf/d of gas for electricity by 2019

South Africa expects to generate close to 8,000MW of gas fired electricity by 2019, to go by separate declarations from President Jacob Zuma and the office of the Independent Power Producer (IPP).
This quantum of power will require at least two Billion cubic feet of gas per day which, with the country’s current gas reserves status, will have to be imported.

“Given the high cost of diesel“, the president told the country’s Parliament, “Eskom has been directed to switch from diesel to gas as a source of energy for the utility’s generators”. Later in the state of the nation address, Zuma declared that the “procurement process for 2,400 megawatts of new gas-fired generation will commence in the first quarter of the new financial year that starts April 1, 2015”.
The February 13 speech officially ended the tone of anxiety in the public discussion about gas imports to South Africa. The country has little proven gas resource, but until now had dithered about gas imports; preferring to spend billions of dollars on diesel to fuel  four of Eskom’s 27 operating power plants: Acacia, Ankerlig, Gourikwa (in the Western Cape Province) and Port Rex (Eastern Cape), all of which were designed to utilize natural gas.

At a gas conference after Zuma’s address, the Independent Power Producer (IPP) Office announced it would release a request for information (RFI) in March 2015 for domestic gas to power projects, to preface a possible 3,000 MW tender that should arise before end of 2015.
Between the four Eskom operated 2,426MW combined capacity OCGT plants, the 2,400MW proposed gas fired plant announced by President Zuma and the 3,000MW capacity that will be added by the planned IPP tender, South Africa should be running 7,826MW of gas-fired plant capacity by 2019. This will require at least two Billion cubic feet of gas per day.

South Africa is potentially Africa’s largest domestic gas market. The government’s hope is that gas imports will help to kickstart the gas market, (including Gas to Liquid, Gas Transportation, Gas to households, Gas to Industry, etc) of which Gas to Power sector will be the anchor industry.
Full report and analysis of the gas import investment opportunity provided by this country’s new approach to gas to power is published in the February 2015 issue of the Africa Oil+Gas Report.

Ghana: MTA Development to Be Submitted in 2015

Fourth field development sanction since 2009

Kosmos Energy reports that “a plan for the full field development of MTA is expected to be presented to the Government of Ghana in 2015”.

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Midwestern Wants To Acquire Mart Resources

By Sully Manope, in Lagos

Commences a private placement to finance the acquisition

Nigerian independent Midwestern Oil and Gas, has made an unsolicited bid to acquire the Toronto Listed Mart Resources.

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African Inspiration Sails into the Gulf Of Guinea

By Foluso Ogunsan

The Nigerian flagged vessel, African Inspiration sailed into the country’s waters on February 15, 2015.

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Ghana Absent in Hess’s Spending Plans For 2015

Hess Corp. will not be drilling either an exploratory or appraisal well offshore Ghana in 2015, it is clear from its budget.

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The Western Cluster Threatens a Flood

Four Nigerian marginal fields “sight” 40,000BOPD as Ullage Constraint Eases Up.

Four marginal fields in the NW Niger Delta, operated by local Nigerian firms, produced over 39,000BOPD at peak in January 2015. The fields are located close to each other and their crudes are evacuated via common facilities, in a cluster arrangement, which is why they are collectively called ‘The Cluster’.
Energia operated Ebendo field, Pillar Oil held Umuseti and Midwestern Oil and Gas managed Umusadege field, all opened up their taps, increasing total production by over 18,000BOPD. Umusadege alone, which is the largest field in the cluster, increased production by about 100% in the space of two months, delivering “a record daily gross volume of approximately 29,000 BOPD in late January 2015”, according to Mart Resources, technical partner to operator Midwestern.

Ebendo topped up production by close to 40% to average 4,800BOPD (injected crude). Pillar Oil increased its output by 20% from 2,500BOPD to 3,000BOPD. The drab performer was Platform Petroleum operated Egbeoma field, which remained at 2,100BOPD. Platform is the only company that has not completed a new well on its field in the last five years. The company credits its ability to produce as much as 2,100BOPD, to “production optimization”. Company executives say their plan is to drill at least a well in fourth quarter 2015, depending on anticipated improvement in oil price.

The key reason for the output surge in the cluster is the easing of ullage constraints by the commissioning of the Umugini pipeline as an alternative route to market. Previously, all the fields were evacuating through ENI operated Kwale facility, which limited their injection to 23,000BOPD.

The 51 km Umugini line came on stream in November 2014, connecting Umusadege and Ebendo fields to the Shell operated Trans Forcados export pipeline. Umugini has a capacity to pump 45,000BOPD, which Shell could take, and it is almost double the 23,000BOPD accepted by ENI.

The initial edition of this article, published on February 12, 2015, credited Egbeoma for topping “up production by close to 40% to average 4,800BOPD”. The error has been corrected here. That credit belongs to Ebendo.

BG Says ‘No Drop Dead Date’ For Tanzanian LNG Sanction

By Toyin Akinosho

‘Asian LNG market grew last year despite the many challenges in the economy’

Any timing on LNG Development in Tanzania, as in other projects “has to be timed with how we see the market demand on one side and the cost of supply or cost of construction on the other side”, said BG’s Chief Operating Officer Sami Iskander.

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