Petrofac Limited Petrofac introduces partner in Mexico (2238W)
31 July 2018 - 2:40AM
UK Regulatory
TIDMPFC
RNS Number : 2238W
Petrofac Limited
30 July 2018
Press Release
30 July 2018
PETROFAC INTRODUCES PARTNER IN MEXICO
Petrofac Limited ("Petrofac" or "the Company") announces that it
has today signed an agreement to sell 49% of the Company's
operations in Mexico(1)(2) , including Santuario, Magallanes and
Arenque, to Perenco (Oil & Gas) International Limited
("Perenco"). The transaction is subject to approval by the Federal
Competition Commission of Mexico (COFECE), which is expected in Q4
2018.
Under the terms of the agreement, Perenco will pay an initial
cash consideration of US$200 million, with US$30 million payable
upon signing and US$170 million payable upon completion. The total
consideration comprises a fixed amount and contingent consideration
depending upon a number of future milestones, including future
field development and migration terms of Petrofac's Magallanes and
Arenque Production Enhancement Contracts. This final amount is
subject to adjustment based on achievement of the milestones above
and will be capped at US$274 million. Petrofac currently estimates
that an impairment charge of approximately US$100 million will be
recognised on completion against its 100% equity interest in its
Mexican subsidiaries(3) . Proceeds from the sale will be used to
reduce gross debt.
Petrofac's Group Chief Executive, Ayman Asfari said: "We are
delighted to welcome an experienced partner in Perenco to our
Mexican operations. They bring strong technical capability that
will complement our existing brownfield operations experience to
strengthen our offering. We look forward to working with them and
the other stakeholders to further develop our mature field
interests in Mexico. Today's agreement also marks further progress
in delivering on our strategy to reduce capital intensity."
Perenco's CEO, Benoit de la Fouchardiere, said: "Following a
previous successful collaboration with Petrofac we have been
delighted to explore further opportunities to work together. Mexico
is a land of opportunities, a new play, a new country and an
exciting new challenge for Perenco. Partnering with Petrofac in
Mexico will give us a fantastic opportunity to reach our goals in a
timely manner and, by our results, demonstrate to the State company
Pemex that we can also be a partner of choice for the future.
"Perenco remains proud of its independence which allows us to
work differently and make our own success. However, by being
pragmatic and opportunistic we are always looking to learn from
others and try to improve ourselves thereby targeting a win-win
relationship with Petrofac. Congratulations to the Perenco and
Petrofac teams for having achieved our joint venture agreement, and
I am looking forward to seeing immediate results from this
promising new Mexican partnership."
NOTES
1) This transaction will be effected by the sale of 49% of
Petrofac Netherlands Holding B.V., which holds the Santuario
Production Sharing Contract, the Magallanes Production Enhancement
Contract (a tariff-per-barrel-based service contract) and the
Arenque Production Enhancement Contract.
2) The gross assets being disposed of (49% of the consolidated
Petrofac Netherlands Holding B.V. group) had a carrying amount of
US$357 million at 31 December 2017. The net assets being disposed
of (49% of the consolidated Petrofac Netherlands Holding B.V.
group) had a carrying amount of US$293 million at 31 December 2017.
Petrofac Netherlands Holding B.V. group made a business performance
net loss of US$29 million for the year ended 31 December 2017 (49%
share equals approximately US$14 million).
3) This is subject to change and the actual charge will take
into account, inter alia, the net assets at the date of completion,
as well as management's assessment of the fair value of contingent
consideration, which includes future Production Enhancement
Contract migration terms.
ENDS
For further information contact:
Petrofac Limited
+44 (0) 207 811 4900
Jonathan Low, Head of Investor Relations
jonathan.low@petrofac.com
Alison Flynn, Group Head of Communications
alison.flynn@petrofac.com
+44 (0) 207 811 4913
Tulchan Communications Group
+44 (0) 207 353 4200
petrofac@tulchangroup.com
Martin Robinson
LEI 2138004624W8CKCSJ177
This announcement contains inside information which is disclosed
in accordance with the Market Abuse Regulation which came into
effect on 3 July 2016.
NOTES TO EDITORS
Petrofac
Petrofac is a leading international service provider to the oil
and gas production and processing industry, with a diverse client
portfolio including many of the world's leading integrated,
independent and national oil and gas companies. Petrofac is quoted
on the London Stock Exchange (symbol: PFC).
Petrofac designs and builds oil and gas facilities; operates,
maintains and manages facilities and trains personnel; enhances
production; and, where it can leverage its service capability,
develops and co-invests in upstream and infrastructure projects.
Petrofac's range of services meets its clients' needs across the
full life cycle of oil and gas assets.
With around 12,500 employees, Petrofac operates out of seven
strategically located operational centres, in Aberdeen, Sharjah,
Abu Dhabi, Woking, Chennai, Mumbai and Kuala Lumpur and has a
further 24 offices worldwide.
For additional information, please refer to the Petrofac website
at www.petrofac.com
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END
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