Ophir Signs Deal to Acquire 75% Stake in WHL Energy's Seychelles Assets
Australian energy company WHL Energy Limited (WHL Energy or the Company) reported Tuesday that it has signed a farm-in agreement with Ophir Energy plc (Ophir) under which Ophir will farm-in to earn a 75 percent interest in WHL Energy’s exploration interests offshore the Seychelles (the Farm-In).
Under the terms of the farm-in, Ophir will fully fund the acquisition of 579 square miles (1,500 square kilometers) of 3D seismic, up to a total amount of $17 million (the Initial Seismic). On meeting the conditions of the farm-in agreement, including formal regulatory approval by the Government of the Seychelles, Ophir will pay WHL Energy $4 million in cash for partial recovery of back costs.
Following the acquisition and evaluation of the Initial Seismic, and on or before July 31, 2015 (or Dec. 31, 2015 if a seismic vessel has not commenced data acquisition by May 31, 2014), Ophir may either withdraw from the farm-in or exercise the option to both:
- fully fund the acquisition of a further 386 square miles (1,000 square kilometers) of 3D seismic, up to a total amount of $12 million (the Additional Seismic); and
- fund 90 percent of the costs of the first exploration well, up to a total amount of $30 million (the Exploration Well)
Upon exercising the option to retain its interests, Ophir will pay WHL Energy a further $2 million in cash for further partial recovery of back costs.
In preparation for the farm-in agreement the joint venture has already commenced or completed the following:
- Requested the approval of the Government of the Seychelles and its regulatory representative PetroSeychelles for the farm-in;
- Lodged the formal request to the Government of the Seychelles and PetroSeychelles for an amended and restated petroleum agreement, under which the minimum work commitments will be varied to undertake a phased 3D seismic program in 2014 and 2015 and extending other commitments and the term of the current exploration period to July 31, 2016; and
- Completed substantial technical, commercial and legal due diligence
Following execution of the farm-in agreement, Ophir and WHL Energy will finalize current negotiations for the completion of a fully documented Joint Operating Agreement (JOA) to undertake the agreed work program. WHL Energy has already released an “Invitation to Tender” for the Initial Seismic.
WHL Energy Managing Director, David Rowbottam, said “the Company is delighted to have secured a farm-in partner of Ophir Energy’s standing. Having a company with the record of Ophir Energy partner together with WHL Energy to take the ‘flagship’ Seychelles project forward is a tremendous milestone for the Company. Since acquiring the Seychelles interests in 2010 the Company has worked extremely diligently to put together an exploration package that would attract a suitably qualified international oil and gas company to join and further develop what the Company sees as a world class asset. Achieving this great result has been most pleasing given the difficult farm out market and current business climate.”
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