HOUSTON (GLOBE NEWSWIRE) — VAALCO Energy, Inc. (NYSE: EGY; LSE: EGY) (вЂњVAALCOвЂќ or the вЂњCompanyвЂќ) today announced so it has finalized a purchase and buy contract (вЂњSPAвЂќ) to obtain Sasol Gabon S.A.вЂ™s (вЂњSasolвЂ™sвЂќ) 27.8% working interest (1) into the Etame Marin block overseas Gabon. The transaction will almost double VAALCOвЂ™s total production and reserves since VAALCO currently owns and operates a 31.1% working interest (1) in Etame. In addition, VAALCO is acquiring SasolвЂ™s 40% non-operated participating interest (1) in Block DE-8 overseas Gabon.
Cary Bounds, ceo, commented, вЂњWe believe the purchase of SasolвЂ™s interest at Etame is a really attractive and value accretive strategic purchase for the organization that verifies our place among the leading separate research and manufacturing businesses in western Africa. In exactly what ended up being an aggressive product sales procedure, here is the perfect development deal we have already been searching for VAALCO. We think the purchase of an additional stake in this field that individuals understand therefore well, having been the operator, is a vital step up applying our strategy. The purchase is anticipated to supply one step improvement in our manufacturing to over 9,000 barrels of oil per day net considering present manufacturing and considerably boosts our income profile. With just minimal improvements to the overhead costs, we anticipate this deal to lessen our G&A cost per barrel by about 40%. The strong functional and performance that is economic of in the past few years has enabled us to develop our web money place, which we have been now making use of to invest in this value accretive purchase and profitably expand our book base.вЂќ
Bounds continued, вЂњWe finished a very effective drilling system previously this year that demonstrated the quality of the asset together with upside that resides on the go, and also this deal, in conjunction with our current statement of acquiring brand West Virginia laws on payday loans brand brand new proprietary 3-D seismic information on the whole Etame Marin block, underscores the fact that we now have within the long-term potential at Etame. We have been also improving upside potential with a 40% non-operated place in Block DE-8 offshore Gabon which include a preexisting development as well as for which you will find intends to possibly drill an assessment well representing a thrilling catalyst that is near-term. To sum up, we are dedicated to making the most of the worth of our Gabon resources in addition to expanding into new development possibilities across Africa. once we have actually formerly stated,вЂќ
The organization has decided to total money consideration for both properties of around $44 million. The effective date associated with deal is, therefore the Company anticipates that the deal will shut within 3 months. Money paid at closing is anticipated to be not as much as $44 million because the quantity compensated should be susceptible to particular customary monetary changes, including modifications to account for estimated good web money moves due to the time scale through the effective date before the closing date. VAALCO intends to fund the cost that is net of deal with money readily available and money from operations. The salon contains closing that is customary including receipt of all of the necessary written consents, approvals or waivers, and offers for many contingent re re payments as much as $6 million, as talked about below. Reserves, manufacturing and results that are financial the passions being obtained are going to be incorporated into VAALCOвЂ™s outcomes for durations following the closing date regarding the deal.
Effect of Acquisition
The metrics offered in the dining table below show business managementвЂ™s estimate of this good effect associated with purchase on VAALCOвЂ™s key metrics.
Block DE-8 Offshore Gabon
The operator, holding the remaining 60% under the terms of the SPA, VAALCO is acquiring a 40% non-operated participating interest in Block DE-8 offshore Gabon, with Perenco. Block DE-8 is in superficial waters and encompasses numerous creating industries which can be maybe perhaps perhaps not an element of the deal and therefore are carved out from the agreement area that VAALCO is acquiring. The salon includes a pursuit within the Akoum-B finding on Block DE-8 which was drilled and it has a possible assessment well prepared. In the event that assessment well is prosperous, maybe it’s tied up straight straight back by way of a subsea conclusion up to a Perenco-operated platform that is existing Block DE-8.
Contingent Re Re Re Payments
A contingent payment of $5 million will be payable to Sasol by VAALCO if Brent oil pricing averages greater than $60 per barrel for 90 consecutive days during the period under the terms of the SPA. There was yet another contingent re payment of $1 million if the DE-8 assessment well is effective.
Evercore Group L.L.C. served as monetary advisors to VAALCO while Ashurst LLP served as appropriate advisors.