Heritage Oil Plc (HOIL.L) announced that Shoreline Natural Resources Ltd., a special purpose private Nigerian company formed between an unit of Heritage and a local Nigerian partner, Shoreline Power Company Ltd., has entered into an agreement to acquire a 45% participating interest in a producing oil mining lease in Nigeria or "OML 30", along with a 45% interest in other assets under the joint operating agreement for OML 30, for $850 million cash, net of costs.
The vendors of the acquisition assets are The Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Ltd. and Nigerian Agip Oil Company Ltd. who each own participating interests of 30%, 10% and 5% in the acquisition assets, respectively, while the rest of 55% participating interest is held by the Nigerian National Petroleum Corp. or NNPC.
Upon the completion of the proposed purchase, OML 30 is expected to be cash generative immediately. Heritage plans to use this cash flow to develop and explore the lease area and its existing portfolio as well as pursuing additional value generating opportunities.
OML 30 is located onshore in the delta in Nigeria, consisting of eight producing fields and associated infrastructure, including a segment of the 850,000 bopd capacity Trans Forcados pipeline. The OML 30 lease extends to June 2019 and, based on current Nigerian law, Heritage expects it to be renewed thereafter.
Following completion, the operatorship of OML 30 would shift from Shell to NNPC's subsidiary, Nigerian Petroleum Development Co.
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by RTT Staff Writer
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