MX Oil plc has agreed to sell its investment in the Aje Field offshore Nigeria to GEC Petroleum Development Company Limited (GPDC), for a total consideration of $18 million.
Initially up to $3.5 million will be advanced to MX Oil in three stages, with the first payment of $2 million expected on or around March 14. These funds will be used to finance the remaining cash calls expected to be required for the investment in order to bring the field into production. GPDC will then send MX Oil a further payment of $5.75 million followed by another payment of $5.75 million six months later.
The remaining balance of $3 million will then be paid in three annual $1 million instalments from the date of the exercise of the acquisition right, although these payments could be accelerated in the event that the oil price exceeds $45 per barrel for a three month period, according to MX Oil.
MX Oil's Chief Executive Officer Stefan Olivier said in a company statement:
"We are delighted that we have now been able to finalise agreement for the sale of our investment in the Aje Field with GPDC which already has substantial assets within the region. I look forward to updating the market as the sale progresses and the Aje Field nears production."
GPDC's Chairman/CEO Joe Obiago commented in a company release:
"We are very excited by this transaction. The Aje Field (and OML 113) is a strategic fit for GPDC as it adds 10 million barrels of oil equivalent 2P net reserves and helps diversify our asset portfolio into the resources-rich Dahomey basin and the medium to long term gas supply play of Lagos and the West African corridor, which is an important hedge against volatile oil prices. The asset complements our existing portfolio of five prime assets at various stages of development and achieves our immediate corporate objective of first production milestone in 2016."