VAALCO farms into offshore Gabon block, drilling may follow

Nov. 18, 2020
VAALCO Energy has agreed to two license transactions with Sasol offshore Gabon.

Offshore staff

HOUSTONVAALCO Energy has agreed to two license transactions with Sasol offshore Gabon.

The company will acquire Sasol’s 27.8% stake in the Etame Marin block, which it currently operates with a 31.1% interest.

In addition, VAALCO will take on Sasol’s 40% interest in offshore block DE-8, operated by Perenco.

The Etame Marin transaction should raise VAALCO’s production to 9,150 b/d, and will nearly double the company’s reserves, with minimal additions to its overhead costs, according to CEO Cary Bounds.

“We completed a highly successful drilling program earlier this year that demonstrated the quality of the asset and the upside that resides in the field, and this transaction, coupled with our recent announcement of acquiring new proprietary 3D seismic data over the entire Etame Marin block, underscores the belief that we have in the long-term potential at Etame.”

Block DE-8 contains the Akoum-B discovery drilled in 2003, with plans for a potential appraisal well in 2021. If this proves successful, the field could be tied back via a subsea completion to a Perenco-operated platform on the block.

The shallow-water concession encompasses multiple producing fields, but these are not part of the transaction, being outside the contract area.

VAALCO will pay a further $5 million to Sasol if Brent oil pricing averages more than $60/bbl for 90 consecutive days between July 1, 2020 and June 30, 2022, and an additional $1 million if the DE-8 appraisal well is successful.