Burren to Acquire Stake in M'Boundi Field
Burren Energy Plc has signed an agreement with Eni Congo SA, a wholly owned subsidiary of Italian group Eni S.p.A, to acquire an additional 5.5% interest in the M'Boundi oil field in the Republic of Congo (Congo) and a 2% interest in the surrounding Kouilou exploration license. The effective date is 1 January 2007. The total transaction price, payable in cash, amounts to US$154 million and will be financed from Burren's existing cash resources.
On a pro forma basis, assuming the transaction had occurred with effect from 1 January 2006, these additional interests would have added US$17 million to Burren's 2006 net profits and US$36 million to gross assets at year end. Burren's 2006 working interest production would have increased by 9% and year end reserves by 7%.
This acquisition is contingent upon the successful completion of Eni's acquisition from Maurel & Prom (M&P) of certain of M&P's interests in Congo, including the M'Boundi field and the Kouilou exploration license, as announced on 22 February 2007, which is subject to Congolese government approval. Pursuant thereto, ENI will become operator of the M'Boundi and Kouakouala fields and the Kouilou license, subject to completion of the necessary formalities.
Post completion Burren will have a 37% interest in both the M'Boundi field and the Kouilou exploration license. Burren also has a 37% interest in the La Noumbi exploration license and a 33% interest in the Kouakouala oil field.
The Board of Burren believes that this acquisition gives Burren the opportunity to increase its stake in the M'Boundi field on attractive terms with the M'Boundi field offering significant potential which will be fully exploited under the operatorship of ENI. An intensive water injection program is currently under way on the M'Boundi field in order to boost production and a number of exploration wells are planned on the Kouilou license in 2007. Gross production on the M'Boundi field as at February 2007 was 55,400 bopd.
Atul Gupta, Chief Executive Officer, commented:
"The acquisition increases both reserves and production and gives Burren a more
equal partnership in these assets. West Africa continues to be a core region for
Burren and offers material upside potential. With ENI as operator we believe
there is the scope to generate further significant returns and we look forward
to working with them."
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