Vaalco Energy entered into a deal with Sojitz Etame to acquire an additional 3.23% stake in the Etame Marin Permit, offshore of the Republic of Gabon, West Africa.
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Gabon operations. Image from Vaalco. |
The interest acquired represents the full interest owned by Sojitz in the concession. The deal has an effective date of 1 August and is expected to boost Vaalco’s net production by nearly 11%.
The Houston-based independent is operator of, and currently owns a 30.35% participating interest (28.1% working interest) in the fields in the Etame Marin block, which encompasses approximately 28,700 gross acres in shallow water.
Should the deal be approved, Vaalco will hold 33.58% stake in the concession.
Etame Marin consists of four production platforms and nine wells currently producing in the concession, including three subsea well tiebacks. Production from the fields averaged about 19,000 b/d in Q2 2016 and more than 93 MMbbl have been produced since production commenced in 2002, Vaalco confirmed.
Vaalco drilled the first discovery in the field in 1997.
“We believe it has significant upside potential remaining. We have identified at least 17 future drilling opportunities we can pursue when prices recover that we estimate could include about 65 MMbbl of gross unrisked recoverable contingent resources,” Steve Guidry, Vaalco CEO said.
The deal is expected to close within 90 days, subject to customary closing conditions.
Vaalco said it intends to fund the acquisition with the additional US$5 million loan capacity available under the new term loan agreement announced in early July with the International Finance Corp. (IFC), subject to their approval, and with cash on hand.
Last month, Vaalco had to shut-in its South Tchibala 2-H well offshore Gabon, after the electrical submersible pumps (ESPs) failed in June. The well, which was producing some 1700 b/d prior to the ESP failure on 23 June, is expected to be back online by early Q4 2016.
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