Afentra Closes Angola Stake Acquisition from Azule

London-based upstream oil and gas company Afentra PLC has closed the acquisition of a 12 percent non-operating interest in Block 3/05 and a 16 percent non-operating interest in Block 3/05A offshore Angola from Azule Energy Angola Production B.V.

The acquisition increases Afentra's interest in Block 3/05 to 30 percent and in Block 3/05A to 21.33 percent, Afentra said in an announcement, adding that it inherits crude oil stock of approximately 480,000 barrels.

Afentra noted that the payable cash consideration at completion was $28.4 million. The initial cash consideration of $48.5 million was reduced by the impact of cash flow adjustments as of the transaction effective date of October 1, 2022, the company added.

After completion, Afentra reported it had crude oil stock of around 840,000 barrels and that its net debt is expected to be $46.2 million.

The Angolan government approved the transaction in April.

"The completion of the Azule Acquisition is the final step in the complex process of acquiring a material equity position in both Block 3/05 (30%) and Block 3/05A (21.33%) through three separate transactions,” Afentra CEO Paul McDade said. “We have now achieved our first goal of having significant exposure to these world-class production and near-term development assets. The next step, working closely with our Joint Venture partners, is to deliver the full potential of these assets for the benefit of all of our stakeholders while also reducing the carbon footprint of the assets”.

“As with the previous two transactions the acquisition structure ensures that Afentra benefits from the net cash flow from the assets while working through the completion process, significantly reducing the cash payment at completion,” McDade continued.

“The Block 3/05 asset continues to perform strongly following the successful implementation of an ongoing work program designed to optimize production from the existing wells. The completion of this transaction presents a strong growth platform for Afentra to capitalize on further compelling opportunities in Angola as well as in target markets in West Africa as we seek to build Afentra into a leading African focused independent,” he concluded.

The Azule acquisition follows Afentra’s completion of the acquisition of a 14 percent non-operating interest in Block 3/05 and a 40 percent non-operating interest in Block 23, offshore Angola, from Sonangol in December 2023. The payable cash consideration at completion was $21.1 million. Afentra said in an earlier announcement that the initial cash consideration of $56.5 million was reduced by the impact of cash flow adjustments as of the transaction effective date of April 20, 2022.

The Sonangol acquisition increased Afentra's interest in Block 3/05 to 18 percent, which will increase to 30 percent upon completion of the ongoing Azule acquisition.

Meanwhile, Afentra reported that the combined gross production for Blocks 3/05 and 3/05A averaged approximately 23,000 barrels of oil per day for the first four months of 2024.

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