Investment firm Carlyle is selling Assala Energy, an oil exploration and production company operating in Gabon, to Etablissements Maurel & Prom SA (M&P), a Euronext-listed oil and gas exploration and production company, according to a press release from Carlyle on Tuesday.
The transaction has total consideration of $730 million and is expected to close between the fourth quarter of 2023 and the first quarter of 2024, subject to various approvals, including those of the Republic of Gabon and CEMAC (Communauté Economique et Monétaire de l’Afrique). Centrale) merger control authorization, according to an independent M&P press release.
Carlyle invested in Assala in 2017 through Carlyle International Energy Partners, an energy-focused private equity fund. Due to an investment of more than $1.3 billion over six years, “Assala has transformed itself into one of the leading independent exploration and production companies in West Africa,” Carlyle said, noting the addition of reserves, the improvement of production facilities and infrastructure, and the execution of strategic mergers and acquisitions.
Since the Carlyle acquisition, Assala has increased net production by about 30 percent to about 45,000 barrels per day and extended the reserve life from five to eight years by the end of 2022, according to the current production, Carlyle said. Assala also resumed exploration activity in 2020 to support the company’s long-term growth, Carlyle added.
The acquisition will provide M&P with access to a fully integrated intermediate network and strategic Gamba oil export terminal, as well as a portfolio of organic development opportunities through the combination of the two portfolios, M&P said.
“We would like to thank Carlyle for its financial and strategic support throughout Assala’s growth path, from Shell’s initial development in 2017 to the achievements of greater production and reserve growth than our exceptional team delivered according to best practices and international ESG standards,” said Assala CEO David Roux. “We also want to thank the Government of Gabon for their support during this intense period of investment and redevelopment. We are proud of our achievements to date and look forward to the next stage of growth in our business. The combination with M&P will create a great platform, with its business anchored in Gabon and a continued focus on creating value for its employees, local communities, governments and shareholders.”
“We are proud to have worked alongside David and his team in Assala’s transformation over the past six years,” said Bob Maguire, co-head of Carlyle International Energy Partners. “By investing in the company’s facilities and infrastructure to increase production and reserve life, while decarbonizing its operations, Carlyle has helped Assala become a responsible operator, entrepreneur and partner and has allowed it to contribute significantly to the sustainable economic future of Gabon’s energy industry”.
“Our investment in Assala is a great example of how Carlyle works in partnership with management teams to deliver long-term value from mature assets for the benefit of our investors, as well as the local economy and communities, while which reduces the intensity of emissions,” Carlyle International. Guido Funes Nova, co-head of Energy Partners, said. “Assala is now one of the most efficient and skilled operators of mature onshore assets in sub-Saharan Africa, with a long runway for future sustainable value creation.”
Carlyle and Assala’s management team have also worked closely together to accelerate the company’s decarbonisation goals. Since 2020, Assala has reduced its scope 1 and 2 emissions by approximately 20 percent, primarily through methane leak detection and prevention, gas reinjection, toast reduction and well capping with a excessive gas production, according to the press release. .
“The acquisition of Assala represents a step change for M&P,” said M&P CEO Olivier de Langavant. “The combination of our portfolios provides the Group with a large operating base of long-lived, low-cost onshore assets that offer long-term visibility and substantial development potential in a stable country where M&P has been operating for over fifteen Assala management has done a great job in turning around the assets acquired from Shell in 2017, and M&P intends to continue to build on this success story with the continued support of the combined workforce. The support of our majority shareholder Pertamina allows us to benefit from attractive financing conditions for this acquisition, which will further enhance the creation of value for all our shareholders”.
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