Afentra continues discussions over acquiring Angola blocks

Afentra confirmed on Thursday that negotiations with Sonangol to purchase interests in block 3/05 and block 23 in Angola had continued into the new year.

The AIM-traded firm submitted a non-binding expression of interest for the two blocks in October, with its shares being subsequently suspended from trading.

Since submitting the expression of interest, Afentra said it had been engaged in negotiations with Sonangol to reach agreement on the detailed terms of the transaction.

Those negotiations were ongoing, but the board said there was no guarantee as yet that an agreement would be reached.

The acquisition would be subject to satisfactory completion of due diligence, and agreement of a sale and purchase deal with Sonangol.

Afentra said that if it ultimately proceeded with the acquisition, it would be classified as a reverse takeover under the AIM rules, and so trading in its shares would remain suspended until either the publication of an admission document, or confirmation that its participation in the bid process had ended.

The board said that while the timeline of the process had been extended beyond the previously-expected timetable, it had not diverted the company from the pursuit of other production assets in West Africa.

It said it was appraising “multiple acquisition opportunities” that would support its growth strategy in terms of acquiring assets across the region with solid low-cost production, proven reserves and significant upside.

The firm said it was “disciplined” in its screening process, to ensure all targets met the operational, commercial and environmental factors in its focussed acquisition criteria.

“We are pleased that we were selected by Sonangol to negotiate for block 3/05 and block 23 in Angola, and have been working diligently to find a mutually attractive outcome for both parties,” said chief executive officer Paul McDade.

“Given our ambition to build an African business of scale, we also remain focussed on identifying additional value-accretive opportunities across West Africa and are engaged in a number of active acquisition processes.

“We continue to screen opportunities in jurisdictions that we know well and look forward to updating the market at the appropriate time on the first deal for the company.”