Angola's national oil company Sonagol and Houston-based Cobalt International Energy have signed a sale and purchase agreement allowing Sonangol to acquire all of Cobalt's 40% participating interest in Blocks 21/09 and 20/11 offshore Angola for US$1.75 billion. The agreement, once approved, will have an effective date of 1 January 2015.
Within seven days of signing, a $250 million payment will be made. Cobalt will then be paid $1.3 billion, less approximately $20 million in Angolan tax withholdings, plus approximately $400 million including all reimbursable expenditures from the agreement effective date, following approval of the transaction by the Angolan government. The remaining $200 million will be paid within 30 days of the execution of a transfer of operations agreement, but no later than one year after signing.
Cobalt said that the sale and purchase agreement provides for a smooth transition to a new operator and underscores the parties' commitment to attain the final investment decision for the Cameia development in Block 21/09 by yearend 2015 in order to deliver first oil from Cameia in 2018. Notwithstanding Cobalt's continuing as operator for an interim period, all costs going forward will be borne by Sonangol.
The sale of the blocks will de-risk Cobalt’s balance sheets and eliminates the financial risks associated with project execution, while removing the need to tap capital markets in a low oil market and providing liquidity for further investments.
Last February, Cobalt announced it had discovered the presence of light oil and condensate at its Orca-1 deepwater exploratory well in block 20. At the time the annoucement was made the discovery was thought to have a resource potential of 400-700MMbo.
Image: Offshore Angola assets/Cobalt
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