Standard Bank Group, as mandated lead arranger and bookrunner, has closed a US$550,000,000 syndicated bank guarantee and bridge facilities for Shoreline Natural Resources. This is one of the largest finance deals completed in Nigeria so far in 2012.
Shoreline has used the facility to acquire 45% in OML 30, an oilfield in the Niger Delta of Nigeria, from 1 November 2012.
China Development Bank joined Standard Bank Group as mandated lead arranger. They were joined by lead arrangers Ecobank Nigeria and First City Monument Bank.
The facility was fully underwritten by Standard Bank Group. It was signed with Shoreline on 29 June 2012, has a 12+6 month tenor and is structured as a bank guarantee and bridge facility. Standard Bank Group is now arranging for the permanent financing to replace the bridge facility, which will be either a reserve based loan or other term financing.
Shoreline bought the share in OML 30 from Shell Petroleum Development Company of Nigeria, Total E&P Nigeria Limited and Nigeria Agip Oil Company. The sale forms part of the indigenization process in Nigeria; transferring certain oil and gas assets to local Nigerian ownership.
Shoreline Power Company Ltd and a wholly owned subsidiary of Heritage Oil Plc have established Shoreline as a special purpose private Nigerian company to acquire the 45% participating interest in the producing OML 30. Following completion of the acquisition, Shoreline is one of the leading indigenous oil companies in Nigeria.
Shoreline Power Company Ltd is a subsidiary of Shoreline Energy International Ltd, and is a private sector power generation company in Nigeria and sub-Saharan Africa. Shoreline Energy International Ltd is a Nigerian holding company operating in Africa with a diversified portfolio in construction, oil & gas, and power & infrastructure.
Heritage Oil Plc is an independent upstream exploration and production company, listed on the London Stock and Toronto Exchange and is a member of the London FTSE 250 Index. It has a producing property in Russia and exploration projects in the Kurdistan Region of Iraq, Democratic Republic of Congo, Malta, Pakistan, Tanzania and Mali, and an equity investment in a Libyan oil services company.
About Shoreline’s OML 30 acquisition
OML 30 is located onshore in the delta region, covers 1,097 square kilometres and includes eight producing fields with oil and gas contained in numerous stacked reservoirs, and the acquisition Assets include a 45% interest in the segment of the Trans Forcados pipeline between the Eriemu Manifold and the Forcados River Manifold (known as the OML 30 Trans Forcados Pipeline Segment).
OML 30, Nigeria, has gross proved and probable reserves of 1,114 mmbbls of oil, estimated by independent technical consultants RPS Energy Consultants Limited (“RPS Energy”) and current production of c.35,000 bopd. The economic valuation of proved plus probable reserves is estimated at between US$3,089 million and US$3,789-million.
There is the potential to both increase and stabilise production in the near term through refurbishing infrastructure and re-starting non-producing existing wells. Additionally, existing wells can be worked over to improve completions and gas lift can be installed in a number of existing wells without artificial lift. In the longer term, drilling will target additional reservoir intervals, which will provide a further increase in production levels. It is expected that OML 30 will be cash generative immediately following completion.