Riverstone sells Sierrra oil and Gas – Riverstone Holdings LLC, the manager of Riverstone Energy Limited, has announced that it has agreed to the sale of 100% of its membership interests in Sierra Oil & Gas, an oil and gas company focused on Mexico’s offshore Sureste Basin to DEA Deutsche Erdoel AG, an international independent exploration and production company headquartered in Germany.
Since it was formed in 2014, Sierra has participated in multiple offshore exploration tenders held by Mexico’s National Hydrocarbons Commission, securing six blocks in partnership with majors, national oil companies and large independents. In July 2017, Sierra and its consortium partners announced a historic oil discovery in Block 7. The Zama-1 well confirmed the presence of shallow water light oil resources estimated to be in the range of 1.4 billion to 2.0 billion barrels of oil in place. An appraisal program was commenced in November 2018 with the spud of the Zama-2 well.
The transaction is expected to close during the first half of 2019, following approval by Mexico’s antitrust and hydrocarbons regulators. riverstone Energy will get upfront cash (net of interim funding) approximately equivalent to the current valuation of Sierra in Riverstone Energy’s NAV, as well as subsequent earn-outs and adjustments related to the results of upcoming appraisal and exploration activities along with “the unitization process of the Zama discovery.” [QD comment: unitisation refers to all owners of a field sharing revenues derived from it, rather than competing amongst each other to extract the oil as fast as possible from their bit in the hope that the oil will flow from their neighbour’s section of the oil field into their own. We think this is saying that part of the sale price will be dependent on how much oil Zama produces.]
RSE : Riverstone sells Sierrra oil and Gas