White Nile Ltd has agreed to acquire PA Energy Africa Limited ('PAEA'), a private oil company which operates in Nigeria, for a consideration of US$1.839 million in cash and 3,132,688 new ordinary shares in the Company. The acquisition is part of White Nile's strategy of gaining exposure to additional projects and expanding its geographical reach, which includes Southern Sudan, Ethiopia, Kenya and now Nigeria.
PAEA holds service contracts for the development of two Nigerian marginal fields: the Dawes Island Field in Oil Mining Lease 54 (OML 54) and the Tsekelewu Field in Oil Mining Lease 40 (OML 40), both carve outs under the Nigerian Government's indigenisation programme. The service contracts have been executed with the Marginal Field Licence holders Eurafric Energy and Sahara Energy respectively. Both Eurafric and Sahara are Nigerian companies that acquired their licences in the Marginal Fields licensing round (2004) organised by the Nigerian Department of Petroleum Resources ('DPR').
The Dawes Island Marginal Field was previously held by Chevron, which drilled on it an oil and gas discovery well in 1979. The Tsekelewu Marginal Field was previously held by Shell, which was also successful in making an oil and gas discovery. Both blocks were subsequently covered by 3D seismic surveys. It is White Nile's intention to further appraise the discoveries by drilling on both blocks during the next 12 months, subject to rig availability. Confirmation of economically viable reserves should allow early production, since the blocks are adjacent to currently producing infra-structure. The operators of the marginal fields are two local Nigerian companies.
Application will be made for the admission of the new ordinary shares to trading on AIM and it is expected that the new ordinary shares will be admitted to trading on 22 May 2008.
