Afentra Progresses Angola Stake Acquisition

London-based upstream oil and gas company Afentra PLC has received approval from the Angolan government for the acquisition of a 12 percent non-operating interest in Block 3/05 and a 16 percent non-operating interest in Block 3/05A from Azule Energy Angola Production B.V.

The acquisition follows the sale and purchase agreement between Azule and Afentra’s wholly-owned subsidiary Afentra (Angola) Ltd in July 2023, Afentra said in an announcement Thursday. The closing of the acquisition is expected in the second quarter.

According to the July 2023 announcement regarding the acquisition, the initial consideration will be for $48.5 million. There will be contingent consideration of up to $21 million over three years subject to certain oil price and Block 3/05 production hurdles and an annual cap of $7 million, as well as contingent consideration of up to $15 million linked to the successful future development of certain Block 3/05A discoveries and associated oil price and production hurdles.

“The Angolan government’s approval of the Azule Acquisition allows us to proceed with the completion of our third transaction in Angola providing Afentra a material equity position in these world-class assets,” Afentra CEO Paul McDade said.

“The improved fiscal terms for the Punja Discovery is another clear indication of the support given by the Government of Angola to parties willing to invest in their oil and gas sector. This further encourages us to continue to work with Sonangol and our joint venture partners to grow production and reserves as we develop the vast potential of both the producing fields in Block 3/05 and the significant discoveries within Block 3/05A,” McDade added.

Further, following a request by the Block 3/05A partnership, the Government of Angola has declared the Punja Development Area located in Block 3/05A as a marginal discovery. As a result, the applicable fiscal incentives will be applied to this marginal discovery, significantly enhancing the commercial value of this potential development, Afentra noted.

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

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

Afentra is an upstream oil and gas company focused on opportunities in Africa. The company’s stated purpose is to support a responsible energy transition in Africa by establishing itself as a credible partner for divesting international oil companies and host governments.

Afentra has 18 percent non-operated interest in the producing Block 3/05 and four percent non-operated interest in the adjacent development Block 3/05A offshore Angola in the Lower Congo Basin. Afentra has a current carried interest in the Odewayne Block onshore southwestern Somaliland, according to the company’s website.