Vaaris Resources has secured US$600 million in borrowing base facilities to part-finance its US$800 million acquisition of TotalEnergies EP Nigeria Limited’s 10% participating interest in the Renaissance joint venture, bringing together a syndicate comprising Standard Bank of South Africa Limited, Africa Finance Corporation (AFC) and Shell Western Supply and Trading Limited.
The financing comprises secured senior and junior facilities to Vaaris Resources JVCo Limited, including a senior secured borrowing base facility of up to US$500 million. The facilities are structured around the reserves and underlying value of the acquired upstream assets, providing financing against the petroleum interests being transferred to Vaaris.
Bracewell advised Vaaris Resources JVCo Limited on the US$600 million secured borrowing base facilities, while Latham & Watkins advised the senior mandated lead arrangers and senior lenders on the senior facility of up to US$500 million. Banwo & Ighodalo acted as Nigerian Lenders’ Counsel to the syndicate in connection with the secured senior and junior lending facilities.
Bracewell’s team included Partners Eimear Murphy and Adam Blythe, Counsel Leslie Hansen, Senior Associate Onis Chukwueke-Uba, and Associates Thomas Howard and Olivia Wynne-Thomas. Latham & Watkins’ London team was led by Finance Partner Tom Bartlett, with Associates Nassef Ghazy and Shelby Lee.
Financing a major upstream acquisition
The US$600 million financing represents a substantial portion of the US$800 million consideration for Vaaris’ acquisition of TotalEnergies’ 10% non-operated interest in the Renaissance JV. The acquired interest covers 18 oil mining licences in the Niger Delta, comprising 15 mainly oil-producing licences and three mainly gas-producing licences.
Under the transaction structure, TotalEnergies transferred its participating interest and associated rights and obligations but retained the full economic interest in the three gas-producing licences, OML 23, OML 28 and OML 77. These licences currently account for approximately 50% of Nigeria LNG’s gas supply.
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