Tuesday, January 31, 2023
Home EXPLORATIONS OML 65: Sirius concludes $200m loan deal with Trafigura

OML 65: Sirius concludes $200m loan deal with Trafigura

.Seeks licence renewal for Ororo Field

Sirius Petroleum said it had completed the funding requirements for the Oil Mining Lease (OML) 65 with Trafigura providing up to $200 million via a Senior Loan Facility and that subsequent further junior debt facilities had also now been successfully concluded to support the development of phase 1 of the approved work programme.

The oil firm in a statement said it was working closely through the year with
COPDC and with the NNPC to formalise the approved work programme for phase 1 of the development.

OML 65 is a producing onshore block with 2P reserves of 51 mmbbls.   The existing producing field, Abura, which has been in production since the 1970s, has been ascribed 16.2 mmbbls remaining 2P reserves1 and is currently producing c.10,500 bopd. OML 65 also contains two further discovered and appraised fields, Owopele and Osioka, which have not been developed to date and will form part of the forward work programme. The two discovered fields contain an estimated 34.9 mmbbls additional 2P reserves 1.In addition, there are two targeted deeper prospects at Abura and Osioka containing an additional 227mmbbls oil in place1. The existing production facilities and infrastructure servicing the Abura Field are capable of handling up to 40,000 bopd, the company said.

“The company had signed a MSA with Baker Hughes for the provision of drilling related services for the further development of the Abura Field, representing Phase 1 of the Approved work programme (AWP) and involving the drilling of up to 9 development wells. Baker Hughes will provide its equipment and services on a fixed process contract basis. The first phase of the AWP is estimated to boost production by up to 11,000 bopd. The company also executed a Facility Agreement with Trafigura, post year-end, for the provision of the majority of the funding required for the execution of Phase 1 of the AWP. The facility agreement can be upsized to accommodate the Phase 2 development of the AWP, involving the development of the Owopele and Osioka fields.”

Post year-end, the company said that it had executed agreements with a range of institutional investors for the provision of $15million of subordinated funding, to support the Trafigura senior facility, related to the Phase 1 development.

According to the company’s chairman, J Pryde, following the expiry of the licence on the Ororo Field in 2019, the partners said they had applied for a further extension to the term of the licence from the NUPRC in Nigeria. 

“Before the new request, the Federal Government had granted extension on two previous occasions. An updated CPR was prepared in March 2021, giving a mid-case net present value of the asset of $127.6million based on a dry gas price of $3 per mscf for the life of the field, and a low case net present value of $42.7million. The valuations support the value of the investment held on the Statement of Financial Position and support the view that no impairment triggering events have occurred. The Group intends investing further amounts into the Ororo Field, as part of its strategic development plans. Should the licence renewal process not succeed, the company said that the intangible asset would have to be fully impaired,” he stated.

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