Petrofac to sell interest in GSA development for US$292 million

Petrofac Limited (“Petrofac” or “the Company”) announces that it has signed an agreement to sell Petrofac GSA Holdings Limited(1) to Ithaca Energy (UK) Limited (“Ithaca”) for a total consideration of up to US$292 million. Petrofac GSA Holdings Limited owns Petrofac’s 20% interest in the Greater Stella Area development and its 24.8% interest in the FPF1 floating production facility(2). Petrofac GSA Holdings Limited also owns Petrofac’s long-term receivable from the GSA joint operation partners(3).

Under the terms of the agreement, Ithaca will pay approximately US$145 million by or on completion and a further US$120 million of non-contingent deferred consideration in the period 2020-2023. A further US$28 million of contingent consideration is payable depending on field performance.

The transaction is expected to complete in Q1 2019 and is subject to several conditions precedent, including completion of Ithaca’s acquisition of Dyas UK Limited’s 25% interest in the Greater Stella Area development and its shares in the FPF1 Company in accordance with the agreement executed by Ithaca and Dyas today.

Petrofac estimates that the transaction will result in a post-tax impairment charge of approximately US$55 million(4). Proceeds from the sale will be used to reduce gross debt. Petrofac will continue to provide Duty Holder services to the FPF1 floating production facility on a life of field contract.

Petrofac’s Group Chief Executive, Ayman Asfari said: “This disposal marks a further milestone in our journey back to a capital-light business and, along with recently-agreed transactions in Mexico and Tunisia, marks the significant progress we are making on our stated strategy.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe For Latest Updates

Signup for our newsletter and get notified when we publish new articles for free!