Impact Oil has signed a farmout agreement with TotalEnergies EP Namibia to sell 9,39% undivided interest in Block 2912 and 10,5% in Block 2913B in the Orange Basin.
Block 2912 is under PEL 91 and 2913B is under PEL 56.
Impact Oil’s wholly-owned subsidiary Impact Oil and Gas Namibia (Pty) Ltd and TotalEnergies SE’s subsidiary TotalEnergies Namibia BV signed the agreement.
The transaction includes a full carry-on Impact’s retained interest for all joint venture costs, with no cap, through to receipt of the proceeds of the first sale from the first oil production.
Upon completing this transaction, Impact will hold a 9.5% interest in Blocks 2912 and 2913B.
TotalEnergies will also reimburse Impact Oil in cash for its share of the past costs incurred on the Blocks, net to the farmout interests, estimated to be approximately US$99 million.
The agreement provides Impact Oil with a carry loan for all of Impact’s remaining development, appraisal and exploration costs on the Blocks from January 1st, 2024, until the First Oil Date.
The carry is repayable to TotalEnergies from Impact’s after-tax cash flow and net of all joint venture costs, including capital expenditures, from production on the Blocks post the First Oil Date.
During the carry repayment, Impact will pool its entitlement barrels with those of TotalEnergies for more regular offtakes and a more stable cash flow profile. It will also benefit from TotalEnergies’ marketing and sales capabilities.
The completion of the transaction will be subject to customary third-party approvals from the Namibian authorities and joint venture parties.
TotalEnergies joined Impact and Namcor in 2017, bringing significant deep-water drilling expertise to the joint venture, and in 2019, QatarEnergy joined the joint venture.
Impact joined TotalEnergies and Namcor on the licence in 2019, as did QatarEnergy.
Impact Oil CEO Siraj Ahmed said the pivotal transaction paves the way for its transition from an exploration company to a hydrocarbon-producing company through its participation in developing the world-class Venus discovery.
“This transaction also enables Impact to participate in further exploration opportunities in the Blocks, offering the potential to grow the existing discovered resource base significantly,” Ahmed said.
