SEPLAT Petroleum Development Co PLC today said it has recommenced negotiations to acquire an asset in Nigeria that had previously faced delays.
SEPLAT said it has reached an agreement to release the funds from an escrow account which was set up with a consortium to make a potential acquisition.
The Nigerian-focused oil and gas company said the escrow account was originally set up with the consortium in order to look for opportunities to buy assets from oil and gas companies operating in the region.
Under the agreement, SEPLAT has agreed to release $408 million of the total $453 million held in the escrow account.
“There have been material delays with the underlying acquisition, prompting SEPLAT to reach agreement with the consortium for release of the escrow amount,” it said in a statement.
The remaining $45 million will remain as a deposit in the escrow account as negotiations about acquiring the unnamed asset have recommenced.
“Certain recent events have led to the restart of negotiations by the consortium to secure the asset, and SEPLAT continues to work with them,” it said.
Following the release of the $408 million from the existing escrow account, SEPLAT has placed $29 million of those funds into a new escrow account pending the final terms of the acquisition.
Following the amendments and money transfers, SEPLAT has access to $368 million of the $453 million that was originally held in the escrow account.
If no acquisition is made, the funds held in the escrow account will be returned to SEPLAT, but if the company chooses not to progress with the acquisition, it will need to pay $20 million to the other consortium members but the remaining funds in the escrow account would be released back to SEPLAT.
SEPLAT has also agreed to pay a portion of previously incurred consortium costs related to the potential acquisition, totalling $11 million.
That will be paid in two instalments, with the first $3.5 million being paid immediately and the remaining balance to be paid on a deferred basis, it said.
Earlier this year, SEPLAT had been in talks with Afren PLC, the embattled Nigeria-focused oil and gas company, over a potential takeover offer.
Those talks ended in February after Afren said no “satisfactory” offer had been tabled, but SEPLAT said at the time it reserved the right to make a bid for Afren within six months.
SEPLAT shares were up 6.7 percent to 115.0 pence per share on Thursday morning.