MX Oil invests in Nigeria’s offshore asset

offshore-nigeriaIn Q1 2014, the OML 113 partners had acquired approximately 1,000 sq km of new 3D seismic data over the license. (Image source: Daktriper/Flickr)AIM-listed MX Oil will invest in an indirect, non-operated, five per cent revenue interest in the OML 113 licence offshore Nigeria

OML 113 is located in the Dahomey-Benin Basin and is adjacent to the Afren-operated OPL 310 Block. OML 113 contains the Aje oil and gas field, which was discovered in 1996 and is situated 24 km in water depths up to 450 metres.

The field is a substantial development stage project with proven, flow tested discoveries where production is expected by January 2016. According to the explorer, the investment is in line with the company’s strategy to acquire high impact near term production assets in proven oil and gas jurisdictions to build a cash generative platform.

The Aje field is targeting initial peak production of around 11,000 bpd during first phase development, rising to 19,000 bpd once a second phase development is completed.

The deal was signed with Jacka Resources Ltd, an Australian Securities Exchange-listed company.

In addition, MX Oil has announced the issue of 133mn new ordinary shares via a placing at 4.5p per share to raise US$9.34mn before expenses to provide additional working capital and funding for future capital expenditure and investment.

MX Oil CEO Stefan Olivier said, “We are highly encouraged by the reaction this acquisition has received from both existing and new investors, and we are pleased to now have institutions on our register, alongside our historic and supportive retail shareholder base. Aje, as an investment, ticks all the boxes — compelling economics in the current low oil price environment, a defined development plan in place targeting near term production, considerable exploration upside; located in a prolific hydrocarbon jurisdiction close to existing infrastructure, and acquired at a highly attractive price.

“To have been able to secure this acquisition on these terms is testament to the MX Oil management’s ability to source and secure interests in assets with company-making potential. We are looking forward to announcing a spud date for our Aje production well in the near term and are excited by the prospect of bringing this field into production with our new partners and beginning to realise Aje’s excellent potential.”

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