Chappal Energies plans equity sale after TotalEnergies deal

Chappal Energies, a Mauritius-based oil and gas exploration company, says it is planning to bring on new investors once it completes the purchase of TotalEnergies SE assets in Nigeria. 

In July, the company agreed to purchase TotalEnergies EP Nigeria Limited’s stake in Shell Petroleum Development Company (SPDC) joint venture (JV) for $860 million.

The company agreed to buy TotalEnergies’ 10 percent stake in 15 oil mining leases as well as the Forcados and Bonny export terminals.

According to Bloomberg, following the successful transaction, Ufoma Immanuel, Chappal’s managing director, said the company would be expanding its equity base.

“It’s fair to say that in order to grow and develop we need partnership and some of those partnerships will be on the capital side and that is what we’re focused on,” he said.

Earlier this month, Chappal completed the $1.2 billion purchase of Equinor Nigeria Energy Company, a unit of the Norway-based Equinor ASA.

The deal required an immediate payment of $710 million with the balance structured as contingent payments.

Subsequently, Chappal sold 5.14 percent of its equity to Aradel Holdings, a Nigerian oil and gas firm, for an undisclosed sum.

Immanuel said Chappal plans to acquire more assets and produce about 77,000 barrels of oil equivalent per day over the course of the next two to three years.

The MD said he expects to see more movement in the company’s balance sheet over the coming 24 months.

He said the size of any future equity sale would be determined by shareholders, considering the scale of planned expansion and the risk preference of target investors.

Immanuel said the company aims to look beyond Nigeria to sub-Saharan Africa for acquisitions and growth as well as collaborate with partners to optimise production from acquired assets, adding that Chappal’s current shareholders are largely in three groups.

“There is management who own a portion of the equity, there is family office and strategic partnerships,” he said.

Port Louis, Mauritius-based MCB Group, in an emailed statement, told Bloomberg that it contributed $120 million in a $360 million senior secured bridge facility to part finance the acquisition of the Equinor assets.