Key Points
- Impact Oil & Gas sells stakes in Namibian offshore blocks to TotalEnergies, enhancing its role in Namibia’s oil sector.
- TotalEnergies to cover all exploration costs for Impact until first oil sales, minimizing financial risk for Impact.
- Impact retains 9.5% in both blocks, securing exposure to potential high-impact Namibian exploration projects.
Impact Oil & Gas Ltd., a London-based oil exploration player, has completed a critical farm-out of its stakes in Namibia’s offshore Blocks 2912 and 2913B to TotalEnergies EP Namibia BV, marking a significant milestone for both companies in the region’s emerging oil sector.
The deal, according to Oil Review Africa, initiated on January 10, 2024, reached completion after receiving regulatory approval from the Namibian government and formal consent from joint venture partners.
Under the transaction terms, Impact divested a 9.39 percent interest in Block 2912 and a 10.5% interest in Block 2913B to TotalEnergies. The agreement includes a carry arrangement, in which TotalEnergies will cover all remaining exploration, appraisal, and development costs on these blocks from January 1, 2024, until Impact achieves its first oil sales revenue. Impact will then repay the carry loan through a portion of its post-tax cash flow, once all joint venture-related expenses have been met.
Impact and TotalEnergies forge ahead
To further bolster Impact’s position, TotalEnergies paid an upfront $99 million to cover Impact’s share of prior exploration costs on these blocks through to the end of 2023. Following the transaction, Impact retains a 9.5% stake in both Blocks 2912 and 2913B.
Impact CEO Siraj Ahmed commented, “This transaction is transformative for Impact, solidifying our role in Namibia’s oil landscape. Through this carry arrangement, we secure exposure to promising exploration prospects, such as the newly spudded Tamboti-1X well. We look forward to advancing our work alongside NAMCOR, TotalEnergies, and QatarEnergy, and appreciate TotalEnergies’ collaborative support throughout this process.”
Building pathways to production in Namibia
With this strategic farm-out, Impact Oil & Gas is steering towards hydrocarbon production, gradually expanding from a pure-play exploration company. Since the pivotal Venus-1X discovery in 2022, four wells have been drilled, with ongoing data interpretation paving the way for area development planning expected to wrap up by late 2025.
TotalEnergies, meanwhile, extended its contract with Northern Ocean for the DeepSea Mira semi-submersible rig, now focused on further exploration activities in Block 2913B’s northern sector. The deal also opens opportunities in the block’s southern regions, where recent 3D seismic data acquisition could prompt high-impact drilling initiatives.
This transaction and the ongoing exploration efforts underscore Impact’s momentum in Namibia’s evolving oil sector, positioning the company for a significant role in the country’s future as a regional oil producer.
