Maurel & Prom (M&P) said that, following a bid process, its Board of Directors approved the signature of, and M&P has signed, a Share Purchase Agreement (SPA) with Carlyle International Energy Partners for the acquisition of 100% of the shares in Assala Energy Holdings Ltd. and all of its subsidiary entities holding the Assala group’s entire upstream and midstream asset portfolio in Gabon.

The Transaction remains subject to various approvals, including from the Republic of Gabon and CEMAC (Communauté Economique et Monétaire de l’Afrique Centrale) merger control clearance. The closing of the Transaction is expected between Q4 2023 and Q1 2024.

 “The acquisition of Assala represents a step change for M&P. The combination of our portfolios provides the Group with a large operated base of longlife, low-cost onshore assets offering long-term visibility and substantial development potential in a stable country where M&P has been operating for over fifteen years. Assala’s management has done a great job in turning around the assets acquired from Shell in 2017, and M&P intends to continue building on this success story with the ongoing support of the combined workforce. The support of our controlling shareholder Pertamina allows us to benefit from attractive financing terms for this acquisition, which will further enhance value creation for all our shareholders,” Olivier de Langavant, Chief Executive Officer of M&P, stated.

Assala’s assets are highly complementary to M&P’s existing presence in Gabon and the combination will offer significant operational and financial optimisation opportunities. The acquired assets are strategically located adjacent to M&P’s existing assets in Gabon, with midstream infrastructure to be acquired including the Gamba oil terminal and connected pipelines, which will allow M&P to control the transportation and distribution of all of its production within the country. Both M&P and Assala operate nearly all of their oil production, which provides meaningful leverage to optimise operations and costs across the combined portfolio.

Assala produced 40.7 kbopd on a consolidated working interest basis for the first half of 2023, with consolidated working interest 2P reserves estimated by M&P at 97 mmbbls as of 31 December 2022. The Transaction will enable M&P to reach critical scale with proforma consolidated working interest production for the group of 67.8 kboepd (including 64.4 kboepd of operated production) in the first half of 2023, of which 56.5 kbopd in Gabon.

Simultaneous to the Transaction and based on the same economic terms as M&P’s acquisition, the Gabonese government will increase its participation in Assala’s subsidiary Assala Gabon from 25% to 27.5%, with an option to increase it by another 12.5% on similar terms over the next 5 years. This demonstrates the strong partnership and the alignment of interest between M&P and the Gabonese government.

Acquisition consideration and financing The SPA has an economic effective date of 30 June 2022, with a Transaction consideration to the seller payable by M&P at closing of $730 million, subject to typical closing adjustments. Assala’s existing $600 million reserve-based lending (“RBL”) facility will be rolled over at completion of the Transaction. The Transaction consideration and associated costs will be funded via the upsizing of M&P’s existing bank loan by $183 million (to a total of $400 million, as $217 million is outstanding as of end of June 2023) and an acquisition bridge facility for up to $750 million. Both facilities are supported by M&P’s controlling shareholder Pertamina and benefit from favourable terms. The acquisition bridge facility has a maturity of 12 months from its drawdown date which will be at closing of the transaction. The upsizing of M&P’s existing debt facility is not conditional to the Transaction and will be effective by end of August 2023.