London-listed oil and gas independent Afentra has signed a sales and purchase agreement (SPA) with Angola’s national oil company, Sonangol, for stakes in two offshore blocks in the Lower Congo and Kwanza Basins.
Marking the entry of the UK independent into the southern African country, the deal comprises an $80 million upfront payment for stakes in Block 3/05 and Block 23, offshore Angola.
As per the terms of the deal, in addition to the $80 million upfront cash commitment, Afentra could likely pay up to $50 million in contingent payments for Block 3/05 and $500.000 for Block 23. The SPA will see Afentra holding a 20% non-operated interest and a 40% non-operated interest in Block 3/05 and Block 23, respectively. Sonangol will remain the operator of Block 3/05 with a 30% interest while holding a non-operating stake in Block 23 at 20%.
“This highly accretive transaction gives Afentra exposure to a high-quality asset base, underpinned by strong cash flow from stable and long-life production and 20 million barrels of net 2P reserves,” said Afentra CEO, Paul McDade.
With a corporate mission to become the trusted partner of both international oil companies and host government in the divestment of legacy assets, Afentra has centered its corporate strategy on managing and turning fields into profitable assets.
“We are delighted to have agreed terms with Sonangol and signed the SPA for our entry into Block 3/05, Lower Congo Basin, and Block 23, Kwanza Basin in Angola. This transformative deal marks our first acquisition since launch last year, and sees the company enter Angola, a major oil and gas jurisdiction with significant opportunities ahead to build a material business and positively impact the energy transition in Africa,” added McDade.
With the SPA completion expected during Q3, 2022, the next steps in the process include the conclusion of Afentra’s due diligence exercise, the provision of a bank guarantee in respect of the 10% transaction deposit and the completion of the right of first offer process by Sonangol.