Vaalco, a U.S. oil and gas company, has confirmed ongoing discussions with Svenska Petroleum Exploration regarding the debt-free acquisition of the company. Svenska Petroleum’s main asset is a 27.39% interest in the Baobab field offshore Ivory Coast in West Africa.
The Baobab field, located in Block CI-40, has a current working interest production of approximately 4,500 barrels of oil equivalent per day, net of Svenska.
The field is operated by operator Canadian Natural Resources International (CNR), with 57.61%, and the national oil company Petroci holds a 15% interest.
The first well was drilled in 2001, and the theory of oil migration paths into the reservoir was confirmed. An appraisal well was drilled in 2002, and in 2005, only three years later, production from the Baobab field commenced.
In November 2018, production reached 100 million barrels of oil, which still only represents around 10 percent of the oil in place, so expectations are high for many prosperous years to come.
The reservoir is located at a depth of 1500 metres. Production from the field commenced in August 2005 from ten horizontal wells aided by three water injectors.
The produced fluids were co-mingled and transported via flow lines to an FPSO moored at 900 metres of water depth.
Should the possible acquisition proceed, it is expected to be funded by cash on hand, according to Vaalco.
The possible acquisition is also expected to be subject to a number of customary closing conditions, including regulatory and government approvals.
Vaalco stated that they cannot guarantee the signing of a definitive agreement for the potential acquisition or ensure that the acquisition will be completed. They will release another statement if necessary.
