Petrofac has signed an agreement to sell 49 percent of the company’s operations in Mexico, including Santuario, Magallanes and Arenque, to Perenco (Oil & Gas) International.
The transaction is subject to approval by the Federal Competition Commission of Mexico (COFECE), which is expected in the fourth quarter.
Under the terms of the agreement, Perenco will pay an initial cash consideration of US$200 million, with $30m payable upon signing and $170m payable upon completion. The total consideration comprises a fixed amount and contingent consideration depending upon a number of future milestones, including future field development and migration terms of Petrofac’s Magallanes and Arenque Production Enhancement Contracts.
This final amount is subject to adjustment based on achievement of the milestones above and will be capped at $274m. Petrofac currently estimates that an impairment charge of approximately $100m will be recognised on completion against its 100 percent equity interest in its Mexican subsidiaries. Proceeds from the sale will be used to reduce gross debt.
For more information visit: www.petrofac.com
19th October 2018
