LONDON, May 22 -- White Nile Ltd. plans to buy PA Energy Africa Ltd. (PAEA), a private oil company operating in Nigeria, marking White Nile's entry into the country.
White Nile will pay $1.8 million in cash and 3.1 million in shares for the company and will acquire service contracts to develop marginal fields, Dawes Island and Tsekelewu, that were granted under the Nigerian' government's indigenization program. Both blocks have 3D seismic data.
Chevron Corp., previous owner of Dawes, found oil and gas in 1979, and Royal Dutch Shell PLC, former operator of Tsekelewu, also had a discovery in that field. White Nile plans to appraise both discoveries within the next 12 months once it secures a rig.
"Confirmation of economically viable reserves should allow early production, since the blocks are adjacent to currently producing infrastructure," White Nile said.
Dawes is on Oil Mining Lease (OML) 54, and Tsekelewu is on OML 40. Service contracts have been signed with Eurafric Energy and Sahara Energy, respectively. They are the marginal field license holders.
White Nile Chairman Phil Edmonds said the acquisition is part of the company's strategy to obtain assets in oil-bearing areas of Nigeria, Southern Sudan, Kenya, and Ethiopia as "a regional oil company." He said, "We have development programs in Kenya and Ethiopia as we seek to quantify the potential of our interests."
Meanwhile, the firm is evaluating other opportunities in Africa to add to its portfolio.
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