U.S. based oil and gas company Vaalco has confirmed it is in discussions with Svenska Petroleum Exploration for the debt-free acquisition of the company whose primary asset is a 27.39% interest in Baobab field, offshore Ivory Coast in West Africa.
The Baobab field, located in Block CI-40, has current working interest production of approximately 4,500 barrels of oil equivalent per day net to Svenska.
The field is operated by operator Canadian Natural Resources International (CNR), with 57.61%, and the national oil company Petroci holding 15% interest.
The first well was drilled in 2001 and the theory of oil migration paths into the reservoir was confirmed. An appraisal well was drilled in 2002, and in 2005, only three years later, production from the Baobab field commenced.
In November 2018 production reached 100 million barrels of oil, which still only represents around 10 per cent of the oil in place, so expectations are high for many prosperous years to come.
The reservoir is located in water depths of 1500 metres. Production from the field commenced in August 2005 from ten horizontal wells aided by three water injectors. The produced fluids were co-mingled and transported via flow lines to an FPSO moored in 900 metres water depth.
Should the possible acquisition proceed, it is expected to be funded by cash on hand, according to Vaalco.
The possible acquisition is also expected to be subject to a number of customary closing conditions, including regulatory and government approvals.
“There can be no assurance that a definitive agreement for the possible acquisition will be entered into or, if a definitive agreement is entered into, that the possible acquisition will proceed to completion, and the company will issue a further statement as appropriate,” Vaalco said.