Afentra is finalizing the acquisition of shares in Angola from Azule

London-based oil and gas exploration company Afentra PLC has completed the acquisition of a 12% non-operating interest in Block 3/05 and a 16% non-operating interest in Block 3/05A offshore Angola from Azule Energy Angola Production BV

The acquisition increases Afentra’s interests in Block 3/05 to 30 percent and Block 3/05A to 21.33 percent, Afentra said in a statement, adding that it inherits crude oil reserves of approximately 480,000 barrels.

Afentra noted that the cash payment due upon completion was $28.4 million. The initial cash amount of $48.5 million was reduced due to the impact of cash flow adjustments at the effective date of the transaction on October 1, 2022, the company added.

Upon completion of construction, Afentra reported that it had crude oil reserves of approximately 840,000 barrels and its net debt was expected to be $46.2 million.

The Angolan government approved the deal in April.

“The completion of the Azule acquisition is the final step in the complex process of acquiring a significant equity position in both Block 3/05 (30%) and Block 3/05A (21.33%) through three separate transactions,” Afentra CEO Paul McDade said: “We have now achieved our first goal of significant exposure to these world-class production and development assets in the near future. The next step, in close collaboration with our Joint Venture partners, is to ensure the full potential of these assets for the company benefits all our stakeholders, while reducing the assets’ carbon footprint.”

“As with the previous two transactions, the structure of the acquisition ensures that Afentra will benefit from the net cash flow from the assets during the closing process, which significantly reduces the amount of the cash payment upon completion of the transaction,” McDade continued.

“The Block 3/05 assets continue to perform well following the successful implementation of a continuous work program to optimize production from existing wells. The completion of this transaction provides Afentra with a strong growth platform to pursue further attractive opportunities in Angola, as well as target markets in West Africa, as part of our efforts to transform Afentra into a leading independent, Africa-focused company,” he concluded.

The acquisition of Azule follows Afentra’s completion of its acquisition of a 14% non-operating interest in Block 3/05 and a 40% non-operating interest in Block 23 offshore Angola from Sonangol in December 2023. The cash payment upon completion of the transaction was $21.1 million. Afentra said in an earlier announcement that the initial cash consideration of $56.5 million was reduced due to the impact of cash flow adjustments as of the April 20, 2022 effective date of the transaction.

The Sonangol acquisition increased Afentra’s stake in Block 3/05 to 18 percent, which will increase to 30 percent upon completion of the ongoing Azule acquisition.

Meanwhile, Afentra said the combined gross production of blocks 3/05 and 3/05A averaged around 23,000 barrels of oil per day for the first four months of 2024.

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