Custos Energy (Pty) Ltd announced that its subsidiary, Trago Energy (Pty) Ltd, has entered into an agreement with Harmattan Energy Limited, a Chevron Corporation affiliate. The deal involves the transfer of Trago's 10% participating interest in Petroleum Exploration License 90 (PEL 90) to Chevron. This transaction allows Trago to maintain exposure to the significant prospectivity and upcoming activities on PEL 90, including the Nabba-1X exploration well.
The agreement provides for the transfer of Trago's participating interest in PEL 90 to Chevron in exchange for US$11m in cash at completion. Additionally, further contingent consideration will be payable on the achievement of appraisal and production milestones, including revenues associated with commercial production. The estimated commercial production is between 1.5 and 2.5 million barrels of oil, dependent on commodity price assumptions.
Completion of the transaction is conditional upon various governmental, regulatory, and third-party approvals. Custos Energy's chairman and chief executive officer, Knowledge Katti, expressed pride in being a local company that has been a participant in PEL 90 since its award in 2018. He welcomed Chevron as the operator of the license in 2022 and noted the recent addition of Qatar Energy and Equinor as partners.
As part of the agreement, Custos will contribute N$10 million to the University of Namibia (Unam) Foundation towards the construction of Unam's new campus in Walvis Bay. This contribution, expected to be made once the required approvals have been obtained, builds on the Knowledge Katti Foundation's longstanding support for education. The foundation has already sponsored more than 120 Namibian students to attend university.
Knowledge Katti emphasized that Namibia's greatest resource is its young people. As a son of Walvis Bay, he expressed pride in helping bring Unam's first campus to the town. The contribution is a strategic investment that will allow young people from all over Namibia to study close to where the industry is based.
Custos Energy is a Namibian independent oil and gas exploration company focused on attracting investment and expertise to the Namibian offshore industry. Founded over a decade ago by Katti, the company holds a 10% interest in PEL 83, which contains the Mopane discoveries. The transaction with Chevron marks a significant development in Custos' efforts to explore and develop Namibia's oil and gas resources.
The deal demonstrates Custos' commitment to responsible and sustainable business practices. By retaining exposure to the prospectivity and upcoming activities on PEL 90, Custos is positioning itself for potential future growth while minimizing its funding and capital risk. The company's partnership with the University of Namibia Foundation also highlights its dedication to supporting education and community development in Namibia.
Key points
- Custos Energy sells 10% stake in PEL 90 to Chevron for US$11m.
- The transaction allows Trago to retain exposure to prospectivity and upcoming activities on PEL 90.
- Custos to contribute N$10 million to the University of Namibia Foundation for a new campus in Walvis Bay.
