TEMPLARS team was at the PFI Awards ceremony in London to receive the African Deal of the Year Award in recognition of the Firm’s outstanding contributions to Energy and Project Development in Africa. The award was bestowed by Project Finance International (PFI), following Heirs Holdings acquisition of a 45% participating interest in Nigerian oil licence OML 17 and related assets, from the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited, and ENI in 2021.
Accordingly, Mr Desmond Ogba a Partner at Templars offered his thoughts:
PFI Awards is reputed to be the most prestigious event in the global financial industry, the PFI Awards ceremony, is organised by Project Finance International (PFI), a leading source in global project finance reporting, that covers all the major sectors including power, oil & gas, transportation, infrastructure and mining.
This Award is in connection with Templars role in a landmark deal advisory over Heirs holding Oil and Gas Limited (previously called TNOG Oil and Gas Limited), a related company of the investment company, Heirs Holdings Limited, and the conglomerate, Transnational Corporation of Nigeria Plc (“Transcorp”) on its US$800 million acquisition of a 45% participating interest in Nigerian oil mining lease (OML) 17 and associated facilities from joint venture partners Shell, Total and Agip (ENI) and on the multi-tranche US$1.1 billion financing for the acquisition and working capital requirements for the asset.
The transaction is precedent-setting in its use of a multi-tiered debt financing structure, the variety of the makeup of the lending group, and also for being the first divestment in Nigeria by Shell, Total, and Agip to feature a deferred purchase-price component.
The multi-tranche debt financing comprised a senior reserves-based lending (RBL) facility, a junior term loan facility, and subordinated unsecured notes structured as long-term fixed-return instruments with detachable production-linked units. The senior lenders include ABSA Bank, Afrexim Bank, Africa Finance Corporation, Hybrid Capital & Asset Management, Shell Western Supply & Trading, Standard Chartered Bank, Union Bank of Nigeria Plc, and United Capital Plc, while the junior lenders are Shell Trading and Hybrid Capital & Asset Management.
TNOG will step into Shell’s shoes as the sole operator of the OML which has a current production of 27,000 barrels of oil equivalent per day and estimated 2P reserves of 1.2 billion barrels of oil equivalent with an additional 1 billion barrels of oil equivalent resources.
The transaction also involved extensive negotiation of key commercial revenue-generating contracts including the crude transportation and handling agreement for the evacuation and storage of crude oil from OML 17, gas sale agreements (for domestic consumption and export), and crude offtake contracts.
Peter Ndubuisi Akpu is a Business Strategist, a Philomath, a critical thinker, Public Affairs Analyst, and a blogger; studied Law differently at the Ebonyi State University and the Nigerian Law School.