Seplat Energy Plc has officially released its prospectus for the acquisition of Mobil Producing Nigeria Unlimited (MPNU). This announcement comes on the heels of federal government approval in late October 2024, marking a significant milestone more than two years after the initial agreement for the sale of ExxonMobil’s onshore assets to Seplat Energy.
Finalization of the Acquisition
In a statement dated December 9, 2024, Chief Executive Officer Roger Brown confirmed that the transaction will be finalized on December 12, 2024. This acquisition is poised to more than double Seplat’s production capacity, increasing output to approximately 120,000 barrels of oil equivalent per day.
Describing the acquisition as a transformative milestone, the statement emphasized Seplat Energy’s strengthened potential for accelerated growth and enhanced profitability.
“This transaction, which is expected to be completed on December 12, 2024, is transformative for Seplat Energy, more than doubling production to around 120,000 barrels of oil equivalent per day. It provides the company with a significant opportunity to drive growth and profitability while making meaningful contributions to the Nigerian economy,” the statement read.
High-Quality Asset Portfolio
The assets being acquired are recognized as high-quality additions to Seplat’s portfolio, including equity in 11 blocks, 48 producing fields, five gas processing facilities, and three export terminals. These assets offer substantial opportunities for short-term oil gains, in-fill drilling, and multi-Tcf gas projects.
Key Financial Details
Seplat Energy’s $800 million MPNU acquisition is structured as follows:
- $672 million payable at closing.
- A $128 million deposit already paid in 2022.
- A deferred payment of $257.5 million due by December 2025 for decommissioning and joint venture (JV) costs.
Notably, no new equity issuance is required for this transaction. The acquisition significantly elevates Seplat’s financial and operational metrics:
- Pro forma 2P reserves increase by 86% to 887 MMboe.
- Production jumps by 148% to 119,800 boepd.
- Revenue grows by 245% to $1.456 billion.
- Adjusted EBITDA surges by 199% to $800 million.
Strategic Asset Additions
Through this acquisition, Seplat Energy will gain a 40% operated interest in OMLs 67, 68, 70, and 104. It will also secure stakes in the Qua Iboe export terminal, Yoho FSO, and Bonny River Terminal. Additionally, the acquisition transfers approximately 1,000 staff and 500 contractors to Seplat’s workforce.
MPNU’s oil and gas reserves, totaling 409 MMboe, will significantly enhance Seplat Energy’s 2P reserves to 887 MMboe. Furthermore, production is expected to rise by 148%, driven by MPNU’s contributions.
Funding and Completion Timeline
Initially announced on February 25, 2022, and effective from January 1, 2021, the MPNU acquisition was originally valued at $1.283 billion. This included up to $300 million in contingent payments over five years and standard adjustments. Following adjustments, the final consideration is set at $800 million, with $128 million already paid as a deposit.
The remaining $672 million will be funded through credit facilities and cash, with an additional $257.5 million deferred until December 2025 for decommissioning and JV costs.
The transaction is scheduled to close on December 12, 2024, with Seplat’s shares expected to be readmitted to the UK Financial Conduct Authority’s Official List the following day.
