Chibisi Ohakah, Abuja
Africa Finance Corporation (AFC), infrastructure solutions provider in Africa is financing Aker Energy’s deepwater project located offshore Ghana with $100 million of convertible bond notes with a commitment to participate in follow on fundraising activities. Aker Energy confirmed yesterday in a release that it had issued subordinated convertible bonds to AFC of $100 million.
The bonds have a coupon of 5.5% per year and will be converted to equity in the event of an Initial Public Offering (IPO) of Aker Energy, at an agreed discount to an IPO offering price of 1.85% per year. The bonds have a maturity of five years, with an option to extend with another three years, the statement said
Last Monday, the AFC confirmed its support of Aker Energy and said the funds would be used by Aker Energy to finance the development of the Deepwater Tano Cape Three Points block (DWTCTP), a block offshore Ghana containing multiple oil fields. The asset is owned by joint venture partners, including Aker Energy (50%), Lukoil (38%), Fueltrade (2%) and a 10% carry for the Ghana National Petroleum Corporation (GNPC), wholly owned by the government of Ghana. The Pecan field, which is the most appraised in the DWTCTP block and the field to be developed in the first phase is an oil field estimated to contain reserves of about 334 million barrels of oil equivalent.
AFC said this investment was in line with its overall natural resources strategy, which entails building a portfolio of value-added assets across the energy value chain. This investment also marks the beginning of AFC and Aker’s relationship in the exploration and production sector across the African continent; “AFC will offer support to Aker, open new opportunities, and mitigate potential geopolitical risks,” AFC said
On the other hand, AFC said that Aker was an ideal partner for AFC, as it seeks to broaden its partnerships with developers within the natural resources sector. The Deepwater Tano Cape Three Points field is one of Ghana’s principal hydrocarbon assets and is expected to contribute to Ghana’s near term target of an annual production volume of 500,000 barrels of oil equivalent per day.
Aker Energy submitted an integrated plan of Development and Operations (PDO) to Ghanaian authorities for the Deepwater Tano / Cape Three Points (DWT/CTP) block in late March 2019. The integrated PDO presents an overall plan for a phased development and production of the resources in the DWT/CTP contract area. The phased development plan will start with the development of the Pecan field as a firm phase one, being the largest of several discoveries in the area.
Upon PDO approval, the partners will initiate a process to make a final investment decision (FID). First oil from the Pecan field is estimated 35 months after the FID is made. Samaila Zubairu, President & CEO of AFC, commented on the announcement: “This is an opportunity for AFC to invest alongside a technically and financially strong sponsor that requires project development expertise and public sector advice in Africa, both of which AFC is ideally placed to offer.”
His Aker Energy counterpart, Jan Arve Haugan, said; “We value AFC’s vote of confidence by collaborating with Aker Energy and the commitment to further strengthening this partnership going forward. We believe AFC will be a valuable partner to help Aker Energy navigate the opportunities and challenges that lies ahead of us.”
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