Nigeria: Heritage Oil, Shoreline Power Secure $850 mln Oil Asset

VENTURES AFRICA – London listed company Heritage Oil has agreed to buy a stake in a string of Nigerian oilfield assets, known as OML 30, in a deal which would diversify its portfolio and significantly increase its production capabilities, Reuters reported on Sunday.

Heritage and its Nigerian partner, Shoreline Power, have agreed to buy a 45 percent stake in OML 30 from oil majors Shell, Total and ENI.

The partners will also buy a further 45 percent stake in other assets under the joint operating agreement for OML 30, which includes a segment of the Trans Forcados pipeline, for a total cash consideration of $850 million, net of costs.

Heritage’s chief executive Tony Buckingham said in a statement that the acquisition of OML 30 is “transformational for Heritage, providing a material change in production and reserves”

Nigeria is Africa’s leading oil produce and holds the world’s seventh-largest gas reserves.

The British-Canadian oil firm said the OML 30 deal would increase its net production to around 11,350 barrels of oil per day (bopd) from 605 at present.

The acquisition will be financed by a $550 million secured bridge finance facility provided by Standard Bank of South Africa, and an underwritten rights issue raising proceeds of up to $370 million.

Heritage added that the acquisition would be structured as a reverse takeover, meaning that shares in Heritage Oil would be suspended from July 2.

REUTERS