Vaalco in talks to acquire Svenska Petroleum and its West African assets

US oil and gas company Vaalco has confirmed that it is in discussions with Svenska Petroleum Exploration for a debt-free acquisition of the company whose main asset is a 27.39% interest in the Baobab field, offshore Côte d'Ivoire in West Africa.

The Baobab field, located in Block CI-40, currently has a working interest production of around 4,500 barrels of oil equivalent per day net to Svenska.

The field is operated by Canadian Natural Resources International (CNR), with 57.61%, and the national oil company Petroci, with 15%.

The first well was drilled in 2001, and the theory of oil migration pathways into the reservoir was confirmed. An appraisal well was drilled in 2002 and in 2005, just three years later, production from the Baobab field began.

In November 2018, production reached 100 million barrels of oil, which still only represents around 10% of the oil in place. Expectations are therefore high for many prosperous years to come.

The reservoir is located at a water depth of 1,500 meters. Production from the field began in August 2005 from ten horizontal wells assisted by three water injectors. The fluids produced were mixed and transported via flowlines to an FPSO moored at a water depth of 900 meters.

If the acquisition goes ahead, it should be financed by available cash, according to Vaalco.

The potential acquisition is also expected to be subject to a number of customary closing conditions, including regulatory and governmental approvals.

"There can be no assurance that a definitive agreement for the potential acquisition will be reached or, if a definitive agreement is reached, that the potential acquisition will proceed to completion, and the company will issue a further statement if appropriate," Vaalco said