MEOG: Zenith to acquire OMV’s Yemeni assets

A Dutch affiliate of Canada-based Zenith Energy has entered a share purchase agreement (SPA) to acquire Austrian firm OMV’s assets in Yemen in a deal worth just over $21.6mn.

The assets comprise Block S-2, which contains the 6,000 barrel per day (bpd) al-Uqlah oilfield, Block 3 ‘Jardan’ and Block 70, which are in the exploratory phase and have estimated resources of 60mn and 70mn barrels respectively.

According to a press release by the parent company, Zenith Netherlands has paid a deposit of $4.3mn which will be credited back to the buyer “as part of the purchase price upon completion”.

Zenith CEO Andrea Cattaneo said: “The acquisition of OMV Yemen represents a very significant milestone for Zenith Energy. The existing production from the asset and, more importantly, the near-term future oil and natural gas production, indicated by the size of the reserves, position Zenith on an extremely exciting organic growth trajectory.”

The deal follows an announcement by OMV in June that it would sell the assets as part of its plans to shift its strategic focus away from oil.

Ahead of the deal’s potential conclusion, OMV operates Block S-2 and holds a 44% working interest, with China’s Sinopec owning 37.5%, Yemen Oil & Gas Corp. (YOGC) 12.5% and Jersey-registered Yemen Resources Ltd (YRL) 6%. According to the press release, production from the field averaged 7,400 bpd with the field in its ‘primary depletion’ stage, though it holds “highly material unexploited potential”.