Namibia: TotalEnergies Increases Its Interests in Offshore Blocks 2913B and 2912

Rhea-AI Summary

TotalEnergies (TTE) signs agreement to acquire additional participating interest in Namibian blocks 2913B and 2912 from Impact Oil and Gas Namibia. TotalEnergies will own 45.25% interest in block 2913B and 42.5% interest in block 2912 after completion. TotalEnergies intends to share the additional interest with QatarEnergy. Impact will retain a 9.5% interest in each license. TotalEnergies will reimburse Impact for past costs through a $99 million payment at closing and carry Impact for remaining interests until first sales proceeds from hydrocarbon production.

Insights

Energy Sector Analyst

The acquisition of additional participating interests in Namibian blocks by TotalEnergies from Impact Oil and Gas represents a strategic move to consolidate its position in the region, particularly in the Venus discovery. This is significant as it suggests a potential increase in reserves and future production capabilities for TotalEnergies, which could translate into higher revenues and a strengthened market position. The involvement of QatarEnergy as a strategic partner and joint venture member further underscores the significance of the project, indicating potential for enhanced collaboration and resource sharing.

From an energy sector perspective, securing a larger stake in these blocks could provide TotalEnergies with greater control over the development and production timelines, as well as the decision-making process. This can lead to more efficient operations and potentially lower production costs. Moreover, the reimbursement of past costs and the carry arrangement for Impact ensures financial flexibility, which is crucial in the capital-intensive oil and gas industry.

Investors should monitor the progress of this development, as successful exploitation of the Venus discovery could positively impact TotalEnergies' stock performance. However, it's important to consider the volatility of oil prices and potential regulatory challenges in the energy sector.

Financial Analyst

The financial arrangement detailed in the agreement, where Impact receives a $99 million payment at closing and is carried for its remaining interests until first sales proceeds, is a noteworthy component of this transaction. This carry arrangement reduces upfront capital expenditure for Impact, while allowing TotalEnergies to increase its stake without immediate cash flow impact. This type of financial structuring is beneficial in managing the liquidity and leveraging potential of both companies.

For shareholders and potential investors of TotalEnergies, the long-term benefits may include an enhanced asset portfolio and diversified risk. However, the upfront cost and the future obligation to cover Impact's share of production costs until hydrocarbon sales commence could impact TotalEnergies' short-term financials. It is essential to evaluate the projected cash flows from the production against the investment to assess the transaction's impact on the company's valuation.

Additionally, the deal's success hinges on the timely and cost-effective development of the Venus discovery. Delays or cost overruns could negatively affect the expected returns, thus altering the risk profile of the investment.

Market Research Analyst

The global energy market is increasingly focused on resource-rich regions like Namibia for offshore oil and gas exploration. TotalEnergies' move to acquire additional interests in the Namibian blocks is aligned with the broader industry trend of securing high-potential exploration areas. The Venus discovery within block 2913B is particularly promising and increasing the stake in this block could position TotalEnergies favorably in the market.

From a market research standpoint, the consolidation of partnerships and interests in such projects is indicative of confidence in the region's potential. It also reflects on the company's strategy to build a robust portfolio that can withstand market fluctuations. The transaction could signal to competitors and the market at large that TotalEnergies is committed to investing in future growth opportunities despite the current global push towards renewable energy sources.

Furthermore, the involvement of a major player like QatarEnergy could attract additional interest and investment in the region, potentially leading to increased competition and accelerated development of the Namibian offshore sector.

PARIS--(BUSINESS WIRE)-- Regulatory News:

TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) has signed an agreement to acquire from Impact Oil and Gas Namibia (Pty) Ltd (“Impact”) an additional 10.5% participating interest in block 2913B and an additional 9.39% participating interest in block 2912, both operated by TotalEnergies in Namibia. TotalEnergies’ intention is to share this additional participating interest with its strategic partner and joint venture member QatarEnergy.

After completion of these transactions, which will be subject to customary third-party approvals from the Namibian authorities and joint venture parties, TotalEnergies would own a 45.25% interest in block 2913B containing the Venus discovery, and a 42.5% interest in block 2912. Impact will retain a 9.5% interest in each license.

As per this agreement, Impact will be reimbursed for the past costs incurred for these interests, through a $99 million payment at closing. Impact will also be carried for its remaining interests until Impact receives the first sales proceeds from hydrocarbon production, secured via a repayment mechanism based on Impact’s share of production.

“This transaction not only increases our share in the Venus discovery and remaining prospectivity on these blocks, but also represents a key step toward the development of Venus by consolidating the partnership and securing financing of all partners which will add value to all stakeholders”, said Patrick Pouyanné, Chairman and Chief Executive Officer at TotalEnergies.

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About TotalEnergies in Namibia
TotalEnergies has been present in Namibia since 1964 and employs 55 people. TotalEnergies operates two offshore exploration licenses in the Orange basin: Blocks 2912 and 2913B. TotalEnergies is also the 4^th largest fuel distributor in the country, with 40 service stations. In line with its multi-energy strategy, the Company is looking for local opportunities to develop low carbon projects in the country.

About TotalEnergies
TotalEnergies is a global multi-energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our 100,000 employees are committed to energy that is ever more affordable, more sustainable, more reliable and accessible to as many people as possible. Active in nearly 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.

@TotalEnergies | TotalEnergies | TotalEnergies | TotalEnergies

Cautionary Note
The terms “TotalEnergies”, “TotalEnergies company” or “Company” in this document are used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. Likewise, the words “we”, “us” and “our” may also be used to refer to these entities or to their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate legal entities. TotalEnergies SE has no liability for the acts or omissions of these entities. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Information concerning risk factors, that may affect TotalEnergies’ financial results or activities is provided in the most recent Registration Document, the French-language version of which is filed by TotalEnergies SE with the French securities regulator Autorité des Marchés Financiers (AMF), and in the Form 20-F filed with the United States Securities and Exchange Commission (SEC).

View source version on businesswire.com: https://www.businesswire.com/news/home/20240109307193/en/

TotalEnergies Contacts

Media Relations: +33 (0)1 47 44 46 99 l presse@totalenergies.com l @TotalEnergiesPR

Investor Relations: +33 (0)1 47 44 46 46 l ir@totalenergies.com

Source: TotalEnergies SE

FAQ

What is the latest acquisition by TotalEnergies (TTE)?

TotalEnergies has signed an agreement to acquire an additional participating interest in Namibian blocks 2913B and 2912 from Impact Oil and Gas Namibia.

What will be TotalEnergies' ownership after the completion of the transactions?

After completion, TotalEnergies will own a 45.25% interest in block 2913B and a 42.5% interest in block 2912.

Who will TotalEnergies share the additional interest with?

TotalEnergies intends to share the additional interest with its strategic partner and joint venture member QatarEnergy.

What will Impact retain after the agreement?

Impact will retain a 9.5% interest in each license.

How will Impact be reimbursed for past costs?

Impact will be reimbursed for past costs through a $99 million payment at closing and carried for remaining interests until first sales proceeds from hydrocarbon production.