Centurion Acquires Strategic Egyptian E&P Properties
Centurion Energy International has entered into an agreement for the acquisition of a private U.S. corporation. The acquisition includes operated properties in Egypt's Nile Delta region and in Texas, USA. After closing, this acquisition will add approximately 8,200 Boe per day to Centurion's production.
The acquisition of additional landholdings near Centurion's existing Nile Delta gas play is an important element in Centurion's stated goal of becoming a significant player in Egypt's growing LNG industry.
The Egyptian properties include interests ranging between 50% and 54% in three Egyptian concessions and seven development leases comprising 1.3 million acres (653,000 acres, net). The concessions, El Mansoura, Qantara and S.E. El Mansoura, are located in the Nile Delta region of northern Egypt and are contiguous and immediately southwest of Centurion's existing West Manzala and West Qantara Concessions.
The properties are located in the gas prone Nile Delta region and include 4 producing gas fields as well as a producing oilfield.
Current production is approximately 60 mmscf/day (30 mmscf/day net) and 1,250 bbls/d of oil and condensate (625 net). These properties are an important strategic addition to Centurion's Egyptian landholdings and include production and exploration prospects in reservoirs and traps similar to or tested by Centurion's current Egyptian production and exploration focus.
Several gas and condensate play trends have been identified on the new acreage with multi-zone objectives.
The El Mansoura concession has extensive 3D seismic coverage.
The acquisition also includes interests in 9 producing gas wells located northeast of Houston, Texas, USA. The current working interest share of production is approximately 14 mmscf/day, and 250 bbls/d of oil and condensate.
The acquisition is expected to be completed by April 30, 2006. Centurion is buying all of the shares of a private US corporation for cash consideration of US$ 225 million plus working capital and inventory less debt. A deposit of US$11.25 million has been paid and is subject to forfeiture in the event that Centurion does not close for reasons attributable to Centurion. The acquisition is subject to a provision whereby the directors of the private company may, in exercising their fiduciary duties, accept a higher offer prior to the scheduled closing. However, before doing so, the private company must provide Centurion at least three business days' prior notice of its intention to terminate the agreement and during such period negotiate in good faith with Centurion regarding such changes as Centurion may propose. Following the negotiation period, the private company may accept a higher offer if it is superior to Centurion's and the company pays Centurion a termination fee of US$7.35 million.
It is anticipated that the purchase will be funded through a combination of existing working capital supplemented by a bridge financing