Separately, Afentra has also signed an agreement with Sonangol to buy 20% non-operated stake in Block 3/05 and 40% non-operated in Block 23, offshore Angola

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Sequa Petroleum has signed the agreement through Sungara Energies. (Credit: Keri Jackson from Pixabay)

Sequa Petroleum has signed an agreement with Angolan state-owned petroleum and natural gas producer Sonangol Pesquisa E Produção (Sonangol P&P) to purchase stake in three blocks offshore Angola, for a total consideration of up to $500m.

The company has signed the deal through Sungara Energies, which is jointly owned by Namibia’s NAMCOR Exploration and Production, Petrolog Energies, and Sequa Petroleum UK.

Sungara is a new entity focused on Sub-Saharan African upstream oil and gas, to operate and develop oil and gas assets throughout the region.

Under the terms of the agreement, Sequa Petroleum will obtain a 10% stake in Block 15/06, 40% in Block 23 along with its operatorship, and a 35% stake in Block 27 offshore Angola.

In addition to the transaction, NAMCOR, Petrolog and Sequa have signed a shareholder agreement pursuant to which, the companies will have equal shareholdings in Sungara.

The Block 15/06 is owned by a joint venture (JV) comprising Eni as operator, with 36.84% stake, Sonangol P&P with 36.84% and SSI Fifteen with 26.32% stake.

It currently produces more than 100,000 barrels per day of through two large floating production and storage facilities, and has further upside potential.

Sungara intends to fund the transaction through a combination of equity contributions from each of the Sungara partners and third-party debt.

In a separate development, UK-based oil and gas company Afentra has signed an agreement with Sonangol to buy 20% non-operated stake in Block 3/05 and 40% non-operated in Block 23, offshore Angola, for a total consideration of up to $130m.

The consideration comprises $80m upfront payment in cash, up to $50m contingent in payments for Block 3/05, and consideration of $0.5m for Block 23.

Afentra said that the acquisition marks its entry into one of its target markets in West Africa, with an implied acquisition cost of ~$4/boe, based on 2P reserves.

It intends to fund the transaction with new debt facilities and existing cash on the balance sheet. The company is in discussion with potential providers of debt finance.