Page 14 - AfrOil Week 18 2020

AfrOil
NEWS IN BRIEF
AfrOil
UPSTREAM
Gabon: BW Energy
announces operational
update for Dussafu Marin
BW Energy has provided an update on operation and development of the operated Dussafu Marin license in Gabon and impact from the COVID- 19 pandemic. Production activities in Gabon remain uninterrupted as BW Energy complies with public health regulations at all its locations to protect the health of employees and partners, ensure safe operations and contribute to stop- ping the spread of coronavirus.
Dussafu daily operations continue to per- form in line with expectations with four wells (DTM-2H, DTM-3H, DTM-4H and DTM-5H) producing to the FPSO BW Adolo at a current rateofapproximately17,500bpdoilproduction (gross).
Gross production from Tortue averaged 11,485 bpd for the rst quarter of 2020 and total gross production was 1.0451mn barrels of oil. One li ing was completed by BW Energy in the quarter realising an average price of about $33 per barrel. Production cost (excluding royalty) was $21.8 per barrel.
BW Energy share of gross production was 768,150 barrels of oil. Net sold volumes, which are the basis for revenue recognition in the nan- cial statement, were 427,647 barrels, re ecting overli position of 375,500 barrels at the end of the rst quarter. e li ing took place in March and re ected a lower average realised oil price.
In April, one li ing was executed by JV part- ner Gabon Oil Company on behalf of itself and the State of Gabon. Next li ing for BW Energy is scheduled to take place in June.
Total Dussafu production for 2020 is pro- jected to be 15,000-16,500 bpd (gross) based on four producing wells, compared to 11,800 bpd on average in 2019, while OPEX per barrel is expected to decrease to approximately $16-18 per barrel, compared to $21 per barrel on aver- age for 2019.
Drilling of the DTM-6H well was completed in March and the nal installation programme was previously scheduled for June this year. Due to the COVID-19 situation, it is now uncertain when this well can be hooked up to the FPSO BW Adolo. As international travel restrictions limit movement of essential personnel, sub- contractors and equipment to and from Gabon, the Company has also suspended drilling of the planned DTM-7H well and the subsequent exploration well.
As previously announced, BW Energy has decided to defer the Ruche Phase 1 develop- ment. BWE’s total revised capital spending
programme for 2020 now amounts to approx- imately $115mn, of which about $49mn was spent as of the end of March.
Net cash ow from operating activities for the rst quarter of 2020 was $49.8mn and total available liquidity amounted to $168.3mn in cash with no debt as at March 31. BW Energy is continuing the process with a reserve- based lending (RBL) facility with a syndicate of leading banks. e RBL facility will have a six-year term, with an initial amount of $200mn plus an accor- dion of $100mn.
“We have taken decisive action to manage the factors we control by safeguarding people, man- aging OPEX and deferring investments to ensure our resilience amid the current oil market tur- moil,” said Carl K. Arnet, the CEO of BW Energy. “Our business model enables us to quickly adapt to changing market conditions, preserve nan- cial solidity and sustain low oil prices. When markets normalise, we can quickly resume developmentactivityandincreaseproduction.” BW Energy, May 04 2020
SERVICES
Wood in partnership deal with Sasol South Africa
Wood, the global engineering and consultancy company, has been appointed as an engineering partner in a ve-year partnership framework agreement with Sasol South Africa. e agree- ment is to support Sasol’s portfolio of assets across South Africa.
Wood will provide integrated services to Sasol from feasibility studies and front end engi- neering design, through to engineering, pro- curement and construction. The partnership framework approach is a new way of working for Sasol. The mutually beneficial agreement will see all partners working together to maxim- ise e ciency and drive long-term sustainability in Sasol’s operations.
The project will be executed by Wood’s regional o ce and on-site project teams with support from the company’s global capital pro- jects and technical consulting expertise.
Dave Stewart, CEO of Wood’s Asset Solu- tions business in Europe, Africa, Asia and Aus- tralia, comments: “We are delighted to have secured this partnership agreement with Sasol to support their capital projects portfolio across the complete asset life cycle, from feasibility to construction.
“Drawing on Wood’s global capabilities, we will work collaboratively to deliver sustainable, efficient and innovative solutions to support Sasol’s operations in South Africa.”
Wood, April 29 2020
INVESTMENT
Zenith Energy announces
completion of Tilapia
acquisition
Zenith Energy, the international oil and gas production company focused on African devel- opment opportunities, has announced the suc- cessful completion of the acquisition from AIM listed Anglo African Oil & Gas (AAOG) of a 100% interest in its fully owned subsidiary in the Republic of the Congo, Anglo African Oil & Gas Congo (AAOG Congo), which has a 56% majority interest in, and is the operator of, the Tilapia oil eld.
As announced on April 17, 2020, the Com- pany entered into a conditional deed of variation to vary the terms of a share purchase agreement withAAOGfortheacquisitionofa100%interest in AAOG Congo and related intercompany loans for a revised total consideration of GBP200,000.
In accordance with the terms of the amended share purchase agreement, completion has taken place within one business day of AAOG share- holder approval being obtained at the AAOG general meeting held on May 4, 2020.
Pursuant to the terms of the share price agree- ment for the Acquisition, AAOG has novated 100% of the intercompany loans with AAOG Congo to Zenith as of the date of Completion, equivalent to approximately GBP12.5mn. As previously announced, AAOG Congo has approximately $5.3mn in receivables.
Zenith is now working to conclude the nec- essary regulatory process in the Republic of the Congo to approve the transfer of ownership, as well as nalising negotiations for a new 25-year licence for Tilapia.
e Company con rms that, following Com- pletion, it has now assumed control of AAOG Congo and expects to shortly implement a series of cost-cutting measures and management changes to maximise e ciency in the current low oil price environment.
Andrea Cattaneo, Chief Executive O cer, commented: “I am delighted to have now fully completed the acquisition of Tilapia, especially under the recently renegotiated highly favoura- ble terms. We have obtained exceptional value for Zenith shareholders, and I am excited about our potentially transformational development opportunities in the Republic of the Congo at Tilapia. e Republic of the Congo is an enor- mously prospective hydrocarbon province which has proven itself to be a very supportive jurisdiction for junior, independent oil com- panies with ambitious development objectives such as Zenith. Our focus is now on nalising the necessary regulatory process for the transfer
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Week 18 06•May•2020