Update on the acquisition of 10% of Block 15/06 in Angola

31 Oct 2024 15:43 CET

Further to its announcement of 28 April 2022, Sequa Petroleum N.V. (“SPNV”) is pleased to confirm that the Government of Angola has approved the acquisition by NAMCOR E&P of participating interests in Block 15/06 (10%), Block 23 (40%, with operatorship), and Block 27 (35%) (the “Transaction”). Block 15/06 is one of the most prolific licences in deep-water offshore Angola with current oil production circa 100,000 bbl per day, forecasted to increase beyond 200,000 barrels per day within 2 years through an ongoing development programme.

An independent review in 2022 of Block 15/06, using SPE PRMS guidelines for classification of reserves and resources, estimated the remaining recoverable volume of the 10% interest at ca. 55 million barrels of oil from the effective date of the Transaction (April 2022). In 2024 the independent review was updated, increasing the estimated remaining recoverable volume of the 10% interest to ca. 72 million barrels of oil from January 2024 (ca. 78 million barrels from the effective date).

The Transaction was entered into in April 2022 by Sungara Energies Limited (“Sungara”), at the time jointly owned by three partners: the National Petroleum Corporation of Namibia’s subsidiary NAMCOR Exploration and Production (Proprietary) Limited (“NAMCOR E&P”), Petrolog Energies Limited (“Petrolog”), and SPNV’s wholly owned subsidiary Sequa Petroleum UK Limited (“Sequa”).

Angola’s Government approval was preceded by restructuring of the Transaction as a transaction between the national oil companies of Angola and Namibia. Sungara novated the Transaction to NAMCOR E&P on the basis of an agreement including the allocation of the economic interest in the Transaction to the partners, and the rights and obligations of the legal owner as well as the economic interest owners.

On the basis of financial contributions to Sungara, as well as NAMCOR E&P (being the legal owner) carrying liabilities under the license agreements of the Blocks, the allocation of economic interests to the partners was adjusted, resulting in Sequa having a 25% economic interest in the Transaction.

Based on operator’s information and the independent review of Block 15/06, SPNV’s estimate of the break-even oil price is ca. USD 32 per barrel. Assuming an oil price of USD 70 per barrel and taking into account all other costs (including acquisition price, cost of debt, government take, and SPNV’s operating costs), SPNV’s net economic interest in relation to its 25% of the acquired recoverable volume of the Transaction is estimated at ca. USD 10 per barrel.

The Transaction is planned to be funded through a combination of equity contributions from the partners, and third-party debt. Completion of the Transaction is currently planned around the end of the year.

Cautionary notice

This press release may contain information that qualifies as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation. This communication may contain forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Words such as possibly and expected or other similar words or expressions are typically used to identify forward-looking statements. Forward-looking statements are subject to risks, uncertainties and other factors that are difficult to predict and that may cause actual results of SPNV to differ materially from future results expressed or implied by such forward-looking statements. Such factors include, but are not limited to, risks relating to SPNV’s ability to engage a depositary and a listing agent, generate positive cash flows, general economic conditions, turbulences in the global credit markets and the economy, geopolitical events and other factors discussed in SPNV’s public filings and other disclosures. Forward-looking statements reflect the current views of SPNV’s management and assumptions based on information currently available to SPNV’s management. Forward-looking statements speak only as of the date they are made, and SPNV does not assume any obligation to update such statements, except as required by law.

Contacts

Jacob Broekhuijsen

Chief Executive Officer Sequa Petroleum N.V.

info@sequa-petroleum.com