Page 15 - AfrOil Week 48 2021

AfrOil NEWS IN BRIEF AfrOil

MOVES Terms of the Option: The object of the Option amongst other factors, due to the strongly con-
is to provide Zenith with the opportunity to firmed presence of hydrocarbons in nearby wells
Lekoil announces jointly develop the RSCA of OML 141 with accessing the same formations.”
NHNL.
Zenith Energy, November 29 2021
directorate changes and complete the Barracuda-5 (B-5) well, which
Plans have already been finalised to drill, test,
LEKOIL, the oil and gas exploration and pro- is situated between two previously drilled wells INVESTMENT
duction company with a focus on Nigeria and that have both encountered significant hydro-
West Africa, is pleased to announce the appoint- carbons. In the event of a successful outcome, San Leon announces update
ment of Pade Durotoye and Adeoye Adefulu as production will commence immediately using
Non-Executive Directors of the Company, with a barge-mounted Early Production Facility to on potential transaction
immediate effect. initially transport the produced oil to a nearby
Durotoye and Adefulu will each be nom- floating storage and offloading vessel for subse- San Leon Energy, the independent oil and gas
inated by the Company to sit on the board of quent monetisation. production, development and exploration com-
directors of LEKOIL Nigeria Ltd, in accordance The Option gives Zenith the ability to pur- pany focused on Nigeria, has provide the fol-
with the terms of the Shareholders Agreement chase 42mn ordinary shares of NGN1.00 in lowing update on the proposed reorganisation
between the Company and LEKOIL Nigeria Ltd NHNL that are available and unincumbered for to consolidate Midwestern Oil and Gas Co.’s
(and others). issue to Zenith, representing an interest of 42% holding in the Company and Midwestern Leon
The Company is also pleased to announce in the outstanding share capital of NHNL. Petroleum Ltd (MLPL) into a single holding in
that it has agreed an appointment agreement The consideration to exercise the Option and the Company. The Potential Transaction also
with Felicia Kemi Segun that will allow it to thereby acquire a 42% interest in NHNL has includes, inter alia, proposed further debt and
appoint Segun to sit on the board of directors been agreed as $20mn, payable in seven instal- equity investments to be made by San Leon in
of LEKOIL Nigeria Ltd, such appointment to be ments over 270 days each of $3mn, except for the Energy Link Infrastructure (Malta) Ltd (ELI).
made simultaneously with those set out above. first and the last, which will satisfy the remaining San Leon has been informed that Eroton
Commenting on the Board changes and the Consideration payable. Exploration and Production Co., in which San
proposed appointments, the Company’s Interim NHNL will use the Consideration to fund the Leon currently has an indirect 39.2% economic
Chairman, Anthony Hawkins, said: drilling of B-5. The Company has been informed interest, has signed a non-binding term sheet
“The Board is very pleased to welcome Mr. that the drilling location for B-5 has already with Africa Import Export Bank (Afrexim) for
Durotoye, Dr. Adefulu and Ms. Segun to the been acquired by NHNL and all necessary civil a prospective $750mn senior secured reserve-
Company, each of whom brings with them a works (including dredging and clearing of the based lending facility. The purpose of the
wealth of commercial and legal expertise and designated well location) have been performed proposed facility, in addition to refinancing
knowledge. With each of the appointees being in preparation for the mobilisation of a barge- Eroton’s current senior bank debt (of approxi-
Nigerian nationals, experienced in the oil and mounted drilling rig. mately $196mn), is to provide funding which
gas industry in both Nigeria and internationally, A suitable and fully inspected drilling rig will be used by Eroton to acquire an additional
I believe they will add significant depth and prac- has been identified and a site visit is planned 18% interest in OML 18 from two of the other
tical experience to the Board and the Company.” in mid-December 2021, with the expectation partners in OML 18, subject to agreeing docu-
LEKOIL, November 25 2021 of signing a drilling contract in January 2022 mentation and relevant consents, thereby taking
to begin operations during the first quarter of Eroton’s interest in OML 18 to 45%. Eroton is
2022. Production from the Barracuda oilfield is also the operator of OML 18.
UPSTREAM expected to begin during the second quarter of San Leon currently has a 40% equity interest
2022 at a rate of approximately 4,000 barrels per in MLPL with the remaining interest in MLPL
Zenith Energy enters day (bpd) of oil. being owned by Midwestern. MLPL has a 100%
Further development and drilling activities equity investment in Martwestern Energy, which
into option agreement are planned to follow the drilling of B-5, with the in turn has a 98% economic interest in Eroton.
locations for Barracuda-6, -7 and -8 wells having
As part of the Potential Transaction San Leon
for OML 141 RSC in Nigeria already been identified. In the event the Option would increase its indirect economic interest in
was exercised, and Zenith thereby held 42% of Eroton from 39.2% to 98% and, following com-
Zenith Energy, the Africa focused production NHNL, it would only be required to fund its pletion of the Proposed Eroton Transaction,
and development energy company, has entered share of future development work. San Leon’s indirect economic interest in OML
into an Option Agreement with Noble Hill-Net- The Option will expire on January 15, 2022. 18 would increase from the current 10.58% to
work Ltd (NHNL), a private Nigerian oil and gas Andrea Cattaneo, CEO of Zenith, com- 44.1%.
company. mented: “We are delighted to have signed an
NHNL is the sole, 100% holder of a Risk Option to acquire an exclusive material inter-
Service Contract (RSC) for the development of est in NHNL, the sole holder of the RSC for
the North-West Corner of OML 141 in Nige- OML 141, containing the Barracuda and Elepa
ria, defined as the Risk Service Contract Area South Oilfields, following our ongoing due dil-
(RSCA), which covers 105 square km of the igence exercise. The near-term drilling of B-5
Niger Delta region and contains the potentially is an opportunity for Zenith to rapidly achieve
highly productive Barracuda and Elepa South a material progression in its development by
oilfields, as well one prospective field with an exploiting the considerable production potential
estimated 232.7mn barrels of discovered oil of the Barracuda oilfield. We view the risk pro-
(Degeconek 2019 CPR). file of drilling B-5 as low to medium primarily,

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