Agip Mauritania B.V. currently holds a 35% interest in each of Production Sharing Contract Area A, which contains the Banda discovery, and Production Sharing Contract Area B, which contains the Chinguetti and Tiof discoveries.
In a related transaction, Woodside has agreed to on-sell to the remaining joint venturers their pro rata share of the interest being acquired from ENI in each contract area. As a result, Woodside's equity in both contract areas will increase from 35% to 53.84% if, as expected, each joint venturer takes its pro rata share.
Total cost of the acquisition of Agip Mauritania B.V. is US$62 million plus adjustments for activities after an effective date of 1 August 2003. In addition, a contingent payment of up to US$15 million may be paid on achievement of milestones related to future exploration, development and production success.
The net cost to Woodside, therefore, after pro rata allocation of interests among all joint venturers will be US$33.4 million, plus Woodside's share of adjustments. Woodside's share of the US$15 million contingent payment (about US$8 million) would be added as milestones are reached.
Woodside's Africa Business Unit Director, Ian Jackson, said Woodside's increased equity in Mauritania continued the company's strategy of building a sustainable business in Africa.
"For Woodside, as operator of the contract areas, the acquisition increases our equity in a core growth area for the company," Mr. Jackson said.
"It also fits our strategy to aggressively pursue development options in Mauritania where we have made three oil and gas discoveries."
Woodside is scheduled to make a final investment decision on the Chinguetti development by mid-2004 with first production expected in late 2005. This follows the successful production test of the Chinguetti appraisal-early development well in October this year.
The acquisition and on-selling transactions are expected to close early in 2004.
Equity in the production sharing contracts following the Agip acquisition, and assuming pro rata allocation of interests among all of the joint venturers, will be:
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