Energean said on Thursday it will acquire the interests of Chevron in two offshore Angolan oil blocks for a base price of $260 million, as the company moves forward with plans to establish a production hub in West Africa.
Under the agreement, Energean will purchase Chevron’s 31% operated stake in Block 14 and a 15.5% non-operated stake in Block 14K. The transaction is backdated to January 1 and remains subject to regulatory approvals, Reuters reported.
In addition to the base payment, Energean will make contingent payments of up to $25 million per year, capped at $250 million. These payments could continue through 2038 and will depend on future developments and oil price levels.
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The assets in Block 14 currently produce about 42,000 barrels of oil per day in total, equivalent to roughly 13,000 barrels per day net to the acquired interest.
The company expects the acquisition to be immediately cash-flow accretive and plans to finance the deal through debt tied to the acquired assets along with existing group liquidity.
Energean has been increasing investment to boost production amid geopolitical disruptions and is exploring new mergers and acquisitions in the region to expand its portfolio.
The company’s flagship Israeli gas fields have had to shut down twice in the past year due to conflicts in the Middle East.
Last year, a fire at a production platform in Block 14 killed three people.
Chevron said it will remain active in Angola through other assets, including Block 0, Block 33, Block 49, and Block 50, as well as the Angola LNG project and the South N’Dola oilfield.
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Image Credit: Business Insider Africa
