Seplat nears $800m acquisition of Mobil

Seplat Energy Plc, a Nigerian energy company, is on the brink of completing $800m acquisition of Mobil Producing Nigeria Unlimited.

In a notice signed by the Chief Executive Officer of Seplat Energy Plc, Roger Brown, on Monday, the deal, expected to close on December 12, marks a step for Seplat in the country’s energy sector.

The company disclosed that the transaction will involve a final cash consideration of $672m payable to ExxonMobil at closing, with $128m already paid as a deposit in 2022.

An additional $257.5m is deferred until December 2025, covering decommissioning, abandonment, and certain joint venture costs.

The funding for the $672m payment will be sourced from a $350m revolving credit facility, a $300m advance payment from ExxonMobil, and $22m from Seplat’s balance sheet cash.

“The $672 million payable on closing the transaction will be funded by $350 million drawn under the RCF, $300 million new 3-year Advance Payment Facility with ExxonMobil, and $22 million balance sheet cash,” the statement added.

This acquisition is set to more than double Seplat’s production capacity to about 120,000 barrels of oil equivalent per day (kboepd), enhancing its operational scale. The company’s proven and probable (2P) oil and gas reserves will increase by 86 per cent to 887 million barrels of oil equivalent (MMboe), while its combined 2P and 2C reserves will rise by 124 per cent to 1,210 MMboe.

“These assets, which include a 40 per cent interest in key OMLs and the Qua Iboe terminal, are strategically aligned with our growth ambitions,” the statement added.

On the financial side, the transaction will deliver a boost to Seplat Energy’s revenue and profitability. On a pro forma basis for the first half of 2024, revenue will increase by 245 per cent to $1.46bn, compared to Seplat’s standalone revenue of $422m.

Adjusted earnings before interest, taxes, depreciation, and amortisation are expected to grow by 199 per cent to $800m over the same period.

The deal includes a 40 per cent operated interest in four Oil Mining Leases (OMLs 67, 68, 70, and 104) and the Qua Iboe export terminal.

Additionally, the acquisition will bring approximately 1,000 staff and 500 contractors from MPNU into Seplat’s fold, further expanding its workforce.

Seplat’s combined production with MPNU for the first half of 2024 averaged 119.8 kboepd, representing a 148 per cent increase from its standalone production of 48.4 kboepd.

This expanded output capacity positions the company to meet growing energy demand both locally and globally.

The acquisition, classified as a reverse takeover under UK Financial Conduct Authority rules, requires a relisting of Seplat Energy’s shares.

Upon completion, the company plans to engage with investors and analysts in a post-acquisition conference call.

It was earlier reported that the Nigerian National Petroleum Company Limited has applied to a High Court of the Federal Capital Territory, Abuja, to stop its ongoing legal action against several subsidiaries of Mobil Nigeria and the Nigerian Upstream Petroleum Regulatory Commission.