Why Seplat Energy Extends SSPA With Mobil For Acquisition Deal
Recently, the Nigeria’s leading indigenous energy company, Seplat Energy Plc has announced an extension of the Share Sale and Purchase Agreement (SSPA) with Mobil.
In a May 24 notice signed by the Seplat Board Chairman, Mr. Basil Omiyi, the company said that it has extended its partnership with Mobil Development Nigeria Inc. and Mobil Exploration Nigeria Inc. the Share Sale and Purchase Agreement for the acquisition of ExxonMobil’s share capital of Mobil Producing Nigeria Unlimited.
The decision was taken to preserve the transaction pending the resolution of certain legal proceedings and receipt of applicable regulatory approvals. A part of the company statement read:
He said, “In addition, the parties have revised the SSPA such that, in the event that applicable regulatory approvals are obtained and the Transaction closes, ExxonMobil would share in a portion of the value that would otherwise accrue to Seplat Energy in the period between the effective economic date and the completion date of the Transaction.
“The exact amount will depend on a number of factors, including production by MPNU and oil price. Except as disclosed herein, there has been no significant change in terms of the announcement dated 25 February 2022, and the headline consideration, effective date, and contingent payment structure remain unchanged.
“Seplat Energy continues to engage key stakeholders and remains committed to completing the Transaction as soon as possible.”
Recalling that in February 2022, Nairametrics reported that Seplat Energy Plc will acquire the entire share capital of Mobil Producing Nigeria Unlimited (MPNU) for a purchase price of $1.283 million plus up to $300 million contingent consideration, subject to the lockbox, working capital, and other adjustments at closing relative to the effective date.
It was also reported that the Transaction encompasses the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria, which is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations.
Under the transaction, Seplat Energy Plc would acquire a 40% operating ownership of four oil mining leases (OMLs 67, 68, 70, 104) and associated infrastructure (NNPC is a 60% partner), the Qua Iboe Terminal, one of Nigeria’s largest export facilities as well as a 51% interest in Bonny River Terminal and Natural Gas Liquids Recovery Plants at EAP and Oso.
In March 2023, ExxonMobil’s President of Global Upstream, Liam Mallon, told Reuters ahead of the CERAWeek Energy Conference in Houston, USA, that ExxonMobil hoped to get approval from the Nigerian government to sell its shallow water oil production assets to Seplat Energy soon.