U.S. independent energy company Vaalco Energy has announced that it has entered into a sale and purchase agreement with Sasol Gabon to acquire a 27.8% stake in the Etame Marin block. Another agreement relating to the optional acquisition of 40% of Sasol in the DE-8 offshore block was also signed.
The contract, worth $44 million with up to six million dollars subject to customary adjustments and future contingent payment, took effect on July 1, 2020. Funding for the acquisition will come from the company’s operating cash flow.
“We believe that the acquisition of Sasol’s stake in Etame is a very interesting and value-creating strategic acquisition for the company, which confirms our position among the main independent exploration and production companies in Central Africa,” said Cary Bounds, Managing Director of Vaalco Energy.
The transaction enables Vaalco to increase its stake in Etame Marin to 58.9%, potentially doubling its production numbers at the same time. According to current production figures, Vaalco’s output would jump from 4,850 to 9,150 barrels per day.
In addition, it would double the total net production and reserves of the company. According to the latest independent 2P data from contractor CPR, Vaalco’s reserves will increase from 9.2 million barrels to 17.5 million barrels.