Impact Oil & Gas has announced the signing of a farmout transaction related to its interests in Blocks 2912 and 2913B offshore Namibia with TotalEnergies
The transaction includes a full carry, on Impact’s retained interest, for all joint venture costs, with no cap, through to receipt of the first sales proceeds from first oil production.
Impact, through its wholly owned subsidiary, Impact Oil and Gas Namibia (Pty) Ltd, has signed a farmout agreement with TotalEnergies EP Namibia BV, a wholly-owned subsidiary of TotalEnergies S.E., for the sale of a 9.39% undivided participating interests in Block 2912, Petroleum Exploration Licence 91, and a 10.5% undivided participating interests in Block 2913B, Petroleum Exploration Licence 56. On completion of this transaction, Impact will hold a 9.5% interest in each of Blocks 2912 and 2913B.
Impact will also be reimbursed in cash for its share of the past costs incurred on the Blocks, net to the farmout interests, which is estimated to be approximately US$99mn.
This Agreement provides Impact with a carry loan for all of Impact’s remaining development, appraisal and exploration costs on the Blocks from 1 January 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 repayment of the carry, Impact will pool its entitlement barrels with those of TotalEnergies for more regular off-takes and a more stable cashflow profile, and will also benefit from TotalEnergies’ marketing and sales capabilities.
Completion of the transaction will be subject to customary third party approvals from the Namibian authorities and joint venture parties.
Jefferies International acted as financial advisor to Impact on this transaction.
Siraj Ahmed, CEO of Impact, commented, "This is a pivotal transaction for Impact that paves the way for its transition from an exploration company to a hydrocarbon producing company, through its participation in the development of the world class Venus discovery. This transaction also enables Impact to participate in further significant exploration opportunities in the Blocks, offering the potential to significantly grow the existing discovered resource base. We are delighted to be able to continue in this exciting journey with TotalEnergies."