Canada’s Zenith Energy, through its subsidiary Zenith Energy Netherlands, has signed a share purchase agreement (SPA) with Austria-based integrated oil and gas company OMV to acquire the latter’s assets in Yemen.
Under the terms of the SPA, Zenith Netherlands will fully acquire OMV’s entities that own production and exploration assets in Yemen, for a total consideration of $21.6m.
The entities include OMV (Yemen Block S 2) Exploration, OMV Jardan Block 3 Upstream, and OMV Block 70 Upstream, collectively called OMV Yemen.
Zenith Netherlands has already paid $4.3m in deposit, which will be returned by OMV as part of the transaction consideration after the closing of the deal.
Zenith Energy currently owns 49% of Zenith Netherlands, after it sold a 51% stake to a Hong Kong-based company, Hingbo Industries.
Zenith chief executive Andrea Cattaneo said: “The existing production from the asset and, more importantly, the near-term future oil and natural gas production indicated by the size of the reserves, position Zenith on an extremely exciting organic growth trajectory.
“I take the chance to thank OMV and its management for their cooperation in this transaction. Our technical teams shall continue to work closely together as we enter the handover phase and welcome our new colleagues in Yemen to the Zenith family.
“It is our belief that the country has extraordinary economic potential, especially in respect of its oil and gas industry, and we shall seek to maximise our relationship with the local authorities to achieve our development objectives.”
OMV Yemen is one of the largest oil producers in the country, with a portfolio comprising a balance of immediate production and short and long-term growth opportunities.
OMV (Yemen Block S 2) Exploration operates and owns a 44% stake in Block S-2, alongside its partners SINOPEC with a 37.5% stake, YOGC with 12.5%, and YRL with a 6% stake.
Block S-2 was discovered in 1992 by energy company Oxy and entered commercial operations in 2005 after OMV has acquired Preussag Energie International in 2003.
The block produced an average of around 7,400 barrels of oil per day (BOPD) in 2021.
OMV Yemen holds a balanced exploration portfolio, with OMV Jardan Block 3 Upstream owning a 34% stake in Block 3, and OMV Block 70 Upstream with a 19.24% stake.
Furthermore, OMV and Zenith Netherlands are expected to sign a Transitional Services Agreement (TSA) during the completion of the transaction.
The OMV head office in Vienna. (Credit: DanielZanetti/Wikipedia)
