Energy exploration group Afren said today it had increased its stakeholding in upstream company First Hydrocarbon Nigeria.
The London-listed company, which has assets in Nigeria, the Ivory Coast and Kurdistan, said it had bought 23.3 per cent of the Nigerian firm for £70.3million, with a put/call option for a further 12.5% stake at £40.6m.
FHN was formed in 2009 as part of the Nigerian government’s efforts to increase local involvement in the country’s oil and gas sector, with a 45% stake in a portfolio including the Ogini and Isoko oil fields, which have reserves of around 134.6mmboe.
The aim is to increase output at the Ogini and Isoko fields to 50,000 barrels of oil per day, with preparatory work going on into other undeveloped fields in the block.
As part of the deal, Afren executives and managers have sold their stock in FHN, with the proceeds to be used to buy back Afren shares. These shares will, it has been announced, held for at least two years.
“Since FHN’s acquisition of a 45% interest in the OML 26 portfolio of assets, 2P reserves have increased by 231% to 134.6 million barrels, with significant undrilled upside remaining,” said Osman Shahenshah, Afren chief executive.
“The additional acquisition is significantly accretive to our shareholders and we look forward to working closely with NPDC to further increase production and undertake an extensive appraisal and exploration programme on the portfolio.”