Afren said on Thursday that First Hydrocarbon Nigeria, an indigenous Nigerian company set up to buy oil fields sold off by oil majors, would invest $187.5 million for a 45-percent stake in licence OML 26 in Nigeria .
The long awaited deal, which has been flagged by Afren a number of times in recent months, will see First Hydrocarbon Nigeria become operator of the field with the investment comprising the acquisition cost and a share of planned future development.
Afren said the field, which includes two producing and three undeveloped assets, currently produced 5,000 barrels of oil per day but plans were in place to increase production to 40,000 over the next four years.
'This acquisition is materially accretive to Afren's net asset value, and is a strong endorsement to Afren's long term strategy, of working with indigenous companies to reactivate fallow assets held by the major international oil companies in Nigeria,' said Chief Executive Osman Shahenshah in a statement.
The deal is subject to regulatory approval, said Afren, which also said it had agreed terms with BNP Paribas for a $130 million credit facility towards the acquisition cost.
Shares in Afren closed at 115.9 pence on Wednesday, valuing the company at 1.1 billion pounds ($1.7 billion).
(Reporting by Sarah Young; Editing by Julie Crust)
($1=.6333 Pound)
((sarah.young@thomsonreuters.com; +44 207 542 7717; Reuters Messaging: sarah.young.thomsonreuters@reuters.net)
Keywords: AFREN/
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