Vaalco Energy to acquire Svenska Petroleum Exploration for $66.5M

Vaalco Energy announced that it has entered into a sales and purchase agreement to acquire Svenska Petroleum Exploration, a privately-held exploration and production company based in Stockholm, Sweden. Svenska’s primary asset is a 27.39% non-operated working interest in the deepwater producing Baobab field in Block CI-40, offshore Cote d’Ivoire in West Africa. The gross consideration for the acquisition is $66.5M, subject to customary closing adjustments, with an effective date of October 1, 2023. The gross purchase price will be partially funded by a pre-closing dividend of cash on Svenska’s balance sheet to the seller with the balance funded by a portion of Vaalco’s cash-on-hand with no issuance of debt or equity. Closing of the acquisition is expected in the second quarter of 2024, with ultimate timing dependent on final receipt of all necessary approvals. Vaalco currently estimates that the net cash due at closing will be in the range of approximately $30M to $40M, dependent on timing. Vaalco will acquire 100% of the share capital of Svenska from Petroswede in the acquisition with an effective date of October 1, 2023. Gross consideration for the acquisition is $66.5M, subject to customary closing adjustments, with the net cash payment to be made by Vaalco on closing expected to be approximately $30M to $40M depending on a number of factors including the timing of closing. The acquisition is subject to a number of customary closing conditions, including regulatory and government approvals. Svenska’s primary license interest is a 27.39% non-operated working interest in the CI-40 license, which includes the producing Baobab field, located in deepwater offshore Cote d’Ivoire. The field is operated by CNRL, which holds a 57.61% working interest in the project, with the national oil company, Petroci Holding, owning the remaining 15% working interest. The Baobab field is located 30 kilometers off the coast of Cote d’Ivoire in water depths ranging from 900 to 1,300 meters. Baobab consists of five distinguishable reservoir units in Middle to Late Albian sequences. The field was discovered in March 2001 with the Baobab 1X well and a second well, the Baobab 2X, was drilled in 2002 to appraise the field. Commercial production from the field began in August 2005. There have been four drilling campaigns at Baobab to date, with the most recent including four production wells and two water injection wells. All wells are tied back to four subsea manifolds that are connected to an FPSO. Cumulative gross production from the field has been approximately 150 MMBOE, a portion of the estimated over one billion barrels of oil equivalent volumes initially in place. Current production from the Baobab field is approximately 4,500 WI BOEPD, with 1P WI CPR reserves at the Effective Date of 13.0 MMBOE and 2P WI CPR reserves of 21.7 MMBOE. These reserve figures reflect currently sanctioned development activities; however, CI-40 has a significant growth runway with incremental development potential on the Baobab field, as well as the nearby Kossipo field, expected to provide a material uplift to the reserve and production volumes, supporting long-term production of the asset into the late 2030s.