GEC Petroleum Development Co. (GPDC) is delaying a deal with MX Oil to acquire 5% interest in the Aje field offshore Nigeria in order for the company to gather the appropriate funds for the sale.
GPDC is in the process of finalizing its funding to cover both the payments to secure its option and the initial payment due.
While the funding is taking longer than expected, GPDC has informed MX Oil that it is committed to this transaction and expects to have funds available in the coming days.
Despite the delay, MX Oil said that it continues to believe that selling the asset to GPDC is an attractive option for the company's shareholders as the level of proceeds envisaged equates to a significant premium over the company's current market capitalization, and will allow GPDC additional time to put its financing in place.
"GPDC has informed us that they are committed to this transaction and, despite interest from a number of other parties, GPDC's offer remains attractive. Now that the final development expenditure to first oil has been fully covered, the company is well positioned to take the time to achieve the best result for this asset. We are very pleased with the operational progress made in Nigeria and, given that first oil is now imminent, we are comfortable allowing GPDC a little more time to secure their funding,” Stefan Olivier, MX Oil CEO said.
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