Ophir Energy said it has finalized a deal to sell a 20% interest in Tanzanian Blocks 1, 3 and 4 to Pavilion Energy.
The company has received cash of US$1,255 million reflecting the purchase price consideration of US$1,250 million plus a completion adjustment of US$5 million to reflect interest and working capital movements since the effective date of the transaction of 1 January 2014. A further US$38 million is payable following the final investment decision in respect of the development of Blocks 1, 3 and 4, currently expected in 2016.
“The proceeds from this transaction will support our forward plans which includes investing in a number of new opportunities that are under consideration and have transformational growth potential. This is in addition to having the flexibility to rapidly capitalize on any exploration success from the forward drilling programme which is well funded from our existing cash resources,” the company said in a statement.
Nick Cooper, CEO of Ophir, commented: “We are delighted to welcome Pavilion Energy into the Tanzanian LNG development across Blocks 1, 3 and 4. The partial monetisation of our interests is in keeping with Ophir’s strategy of minimising exposure to development capex and realising the value created from exploration success at the appropriate time.”