Lukoil is acquiring a 25% interest held by Jersey-based New Age (African Global Energy) Ltd. in the Marine XII license offshore Republic of Congo.
The $800-million transaction is subject to conditions, including approval by the government.
The 571-sq km (220-sq mi) license is 20 km (12.4 mi) from the shore in water depths of 20-90 m (65-295 ft). It covers four blocks and includes five discovered fields with combined proved and probable resources of 1.3 Bboe.
Nene and Litchendjili currently produce 28,000 b/d of oil (mainly light and low-sulfur) and gas condensate, and 1.7 MMcm/d of gas.
Eni operates with a 65% stake: the other partner is state-owned Société Nationale des Pétroles du Congo (SNPC) with 10%.
Vagit Alekperov, president of PJSC Lukoil, said: “The project is characterized by explored reserves, substantial production growth potential, access to well-developed infrastructure, and it also fits our technological expertise. On top of that, the project is already free cash flow positive.”
New Age retains its 75% operated interest in the adjacent Marine III permit, where SNPC is the sole partner.
The company plans to acquire further 3D seismic data over the license this year and to drill the first exploration well before the end of 2020, targeting the same reservoir horizons developed in Marine XII.
According to Wood Mackenzie, production from Marine XII is set to peak at more than 100,000 b/d by 2025, with a floating LNG development also in prospect.
Jean-Baptiste Bouzard, senior research analyst, said the transaction price is more than $400 million below the consultant’s valuation.
This can be partly explained by New Age’s view of the development costs associated with complex reservoirs, and its preference to focus on the Etinde development offshore Cameroon and to replenish its exploration portfolio.