Another delay bumps acquisition timeline for stakes in Angolan offshore blocks to next month

UK-headquartered and AIM-listed company Afentra plc has run into another delay in completing a deal with Angola’s state-owned oil and gas company Sonangol, which will allow it to acquire an interest in one block and extend its stake in another one offshore Angola.

Based on the SPA signed on 28 April 2022 between Afentra’s wholly-owned subsidiary and Sonangol regarding the purchase of non-operating interests in Block 3/05 (20 per cent) and Block 23 (40 per cent) offshore Angola, an important condition precedent for the Sonangol acquisition was the approval of the extension of the Block 3/05 production sharing agreement (PSA) until at least 31 December 2040.

When the company entered Angola in May 2023 by closing the acquisition of a 4 per cent interest in Block 3/05 and a 4 per cent interest in Block 3/05A from Croatia’s INA-Industrija Nafte, the UK-based firm highlighted that the Block 3/05 JV partners and ANPG, the Angolan oil and gas regulator, had agreed on the terms of the Block 3/05 licence extension.

As a result, the production sharing agreement (PSA) was extended from 1 July 2025 to 31 December 2040. At the time, the Sonangol transaction remained on track to be completed by 30 June 2023.

In an update on Tuesday, 20 June 2023, Afentra explained that Sonangol was pursuing the requisite government approvals for the closing of the transaction. Based on the outstanding workstreams and associated timeframes, the firm expects the completion of the acquisition to occur in July 2023.

“We are working, together with Sonangol, to extend the long stop date for this acquisition accordingly. In addition, the enhanced fiscal terms associated with the Block 3/05 PSA extension have been submitted for the requisite government approvals. We look forward to providing shareholders with further updates in due course,” added Afentra.

While recent gross production levels in Block 3/05 have continued to remain stable, averaging approximately 18,900 bbl/d in May 2023, the water injection levels have averaged around 39,000 bw/d from January through May 2023.

On the other hand, the production in Block 3/05A, at the Gazela field, has continued at about 1,100 bbl/d.