10 June 2011
Further Investment in Seven Energy
Petrofac, the international oil & gas facilities service provider, has agreed to invest up to US$75 million, funded from cash resources, into Seven Energy International Limited (‘Seven Energy’), subject to certain conditions being met. The additional investment will take Petrofac’s interest to 24.5% on a fully diluted basis.
Seven Energy is a leading Nigerian production and development company. Its management team, led by chairman, Philip Ihenacho and chief executive, Scott Aitken, has a long and successful track record of developing assets with low geologic risk profiles in the West African hydrocarbon industry. As at 31 December 2009, Seven Energy had gross assets of approximately US$528 million and reported a loss after tax for the year ended 31 December 2009 of approximately US$52 million.
In November 2010, Petrofac entered into a strategic alliance with Seven Energy and invested US$100 million, to acquire a 15.0% interest (12.6% on a fully diluted basis). This additional investment will assist Seven Energy with the further development of its existing and potential opportunities.
Since the initial investment, Petrofac has provided experienced personnel to assist with the delivery of Seven Energy's key existing projects, and continues to provide active engineering and procurement support.
Gordon East, managing director, Production Solutions, commented: "We have worked closely with Seven Energy’s team since we made our initial investment. This has increased our confidence in the value of their existing and potential portfolio of oil & gas assets. As the relationship with Seven Energy progresses, we will continue to provide capability from across the Petrofac group to support their development activities, which in turn will drive value for the shareholders of both Petrofac and Seven Energy.
“At the same time, we will continue to build our knowledge of local operations as we focus on building a local presence for Petrofac in Nigeria. We are making good progress and the knowledge and exposure we have gained during the course of the last six months has resulted in the identification of additional potential prospects for the group.”
Phillip Ihenacho, chairman of Seven Energy, added: "The Petrofac alliance has been important in building additional capacity within Seven Energy, and in helping us to achieve our objectives. Since the recent elections in Nigeria there is renewed business confidence which is creating a very positive operating environment. Petrofac’s additional investment demonstrates their belief in the potential for Seven Energy as a firm, and in the opportunities for developing our business model in Nigeria.”
Interests in Seven Energy expressed on a fully diluted basis assume the full conversion of all convertible securities and exercise of all outstanding warrants and options.