(News Bulletin 247) – The French oil group specializing in the extraction of oil and natural gas has announced the signing of a contract to buy 100% of this company, in exchange for a consideration of 730 million dollars. Assala has complementary assets located close to those of Maurel & Prom in Gabon.

Maurel & Prom strikes a blow with a transforming acquisition. The French oil company born in the 19th century and very present in Africa (about 90% of its 700 employees) announced Monday evening the signing of a contract to buy 100% of the capital of Assala Energy Holdings, a company specializing in oil exploration and production in Gabon, a key country for Maurel & Prom.

This purchase will be made from the private equity firm Carlyle, for consideration of 730 million dollars (approximately 670 million euros), i.e. an amount slightly lower than the market capitalization of Maurel & Prom (slightly more 900 million euros). This consideration will be paid upon completion of the transaction, which is scheduled between the third quarter of 2023 and the first quarter of 2024, once the various authorizations have been obtained, in particular the agreement of the Republic of Gabon and that of the Economic and Monetary Community of central Africa.

In addition, Maurel & Prom will roll over Assala’s $600 million “Reserves Based Lending” facility – a form of loan used for oil projects – upon closing of the transaction.

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Complementary assets

The transaction will be financed by an increase in Maurel & Prom’s current bank loan to $183 million and by a one-year acquisition loan, the amount of which may reach a maximum of $750 million. The company claims to have obtained this latest financing “on favorable terms thanks to the support of Pertamina”, an Indonesian oil group which is the majority shareholder of Maurel & Prom.

The operation will greatly increase the production of the French company. Assala produced 40,700 barrels per day in the first half of the current year, which will enable Maurel & Prom to reach critical mass. The company thus indicates that assuming that Assala is included in its accounts, its production would have reached, over the first six months of 2023, 67,800 barrels of oil equivalent per day, including 56,500 in Gabon.

“Assala’s assets are highly complementary to Maurel & Prom’s activities in Gabon and the combination will allow significant operational and financial optimizations”, also explains the company. “The acquired assets are strategically located near Maurel & Prom’s existing assets in Gabon, and the transport and storage infrastructure acquired includes in particular the Gamba oil terminal and the pipelines connected to it, which will enable Maurel & Prom to control the transport and distribution of all of its production in the country,” the French company continued.

On the Paris Stock Exchange, the market welcomes this announcement, the acquisition thus allowing Maurel & Prom to reach a new dimension in terms of size. The action of the oil group rose 9.3% around 10:25 a.m., and peaked at more than 13% at the start of the session.

This announcement comes shortly after the group published its first half accounts, at the beginning of the month, with results logically down sharply, due to the fall (-29%) in oil market prices compared to the same period of 2022. Maurel & Prom had however generated a positive net result of 53 million euros and an operating result of 93 million euros, down 54% over one year.