Africa Oil Corp. has announced a significant development - a farm down agreement with branches of TotalEnergies SE and QatarEnergy for the Orange Basin Block 3B/4B situated offshore in South Africa. The deal could be worth up to $46.8 million for Africa Oil.
Once the transaction is complete and certain standard conditions are met, TotalEnergies will take over as operator of Block 3B/4B. For this agreement, Africa Oil has partnered with its associates Eco (Atlantic) Oil & Gas Limited and Ricocure Ltd through their relevant subsidiaries.
The agreement stipulates that Africa Oil will receive staged payments amounting to a total cash sum of $10 million. There are specific milestones to be achieved for these payments to be released, with $3.3 million to be paid at the deal's completion. The remaining balance will then be paid in two following installments, each being contingent upon achieving significant operational and regulatory milestones.
At present, through AOSAC, Africa Oil possesses an operational 26.25% interest in Block 3B/4B. Meanwhile, Eco and Ricocure hold interests of 20% and 53.75% respectively.
Upon closure of the deal, subject to fulfilling certain standard conditions, Africa Oil will sustain a 17% interest. The residual interests in Block 3B/4B will be allocated as follows: TotalEnergies with 33%, QatarEnergy with 24%, Ricocure with 19.75%, and Eco with 6.25%.
In commenting on the new partnership, Africa Oil's CEO, Dr. Roger Tucker, expressed his enthusiasm. He viewed TotalEnergies and QatarEnergy's involvement as an affirmation of the potential value of Block 3B/4B, drawing attention to their in-depth geological knowledge of the basin and their noteworthy nearby discoveries. He also noted TotalEnergies' broad expertise in deepwater drilling and development.
