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Tunisia: OMV expands E&P portfolio with acquisition of Pioneer Natural Resources' Tunisian assets

06 Jan 2011

  • OMV acquires Tunisian Exploration and Production (E&P) subsidiaries of Pioneer Natural Resources for USD 800 mn plus working capital
  • Transaction adds immediate production and significant exploration and development upside
  • Substantial operational synergy potential given adjacency to OMV’s existing Tunisian assets
  • Acquisition in line with the corporate strategy to pursue bolt-on acquisitions in E&P to enable future growth 

OMV has signed an agreement to purchase 100% of the issued share capital of Pioneer Natural Resources Tunisia and Pioneer Natural Resources Anaguid from Pioneer Natural Resources, an independent US oil and gas company, for a purchase price of USD 800 mn plus working capital of Pioneer Tunisia. The working capital amounts to USD 65.7 mn and will be adjusted as of closing based on the 2010 audited financial statements as well as any dividend distributions to and capital contributions from the seller following December 31, 2010. Closing of the transaction is expected in Q1/11.

Jaap Huijskes, OMV Executive Board member, responsible for E&P, stated: 'I am delighted to announce this acquisition of Pioneer’s Tunisian subsidiaries, as a result of which OMV will substantially increase its production and reserves base in Tunisia, thus ensuring a sustainable business in the years to come. OMV is fully committed to unlocking the hydrocarbon resource potential in southern Tunisia together with its partners and to supplying gas to the domestic market. The acquisition is in line with the company’s strategy to achieve synergy effects with existing OMV assets and to pursue bolt-on acquisitions in E&P to enable future growth.'

The transaction will significantly strengthen OMV’s position in Tunisia, an important country in the E&P core region North Africa. OMV will acquire immediate production of approx. 5,700 boe/d (average net production in Q4/10), 90% is attributable to oil and 10% to gas. Based on a report by DeGolyer MacNaughton of June 2010, Pioneer Tunisia’s acreage holds 2P reserves of 38 mn boe and 3P reserves of 59 mn boe. The acreage offers considerable exploration upside and will complement OMV’s existing south Tunisian assets, Jenein Sud and Nawara, very well. From a strategic point of view, OMV will be able to unlock substantial synergy potential in field operational activities. Furthermore, Pioneer Tunisia and OMV are both partners in the South Tunisia Gas Project (STGP) which aims to build a 320 km gas pipeline from the Adam production concession to the city of Gabes by 2014 to supply the Tunisian domestic market with gas. With the now reached consolidated partnership structure, the decision making process for the STGP will be facilitated.

The transaction consideration will be initially funded with existing cash and committed credit lines. OMV remains committed to strict capital discipline and retains the clear objective of maintaining a strong investment grade credit rating.

Photo - see caption

Pioneer Tunisia’s interest in the Anaguid exploration permit and in the Mona/Durra production concession is subject to a pre-emption right of Pioneer Tunisia’s partner under the respective Joint Operating Agreement. Anaguid and Durra/Mona account for 13% of the purchase price. In case the pre-emption right is exercised and Pioneer Tunisia’s partner acquires the shares in Pioneer Natural Resources Anaguid Ltd., the purchase price will be adjusted accordingly.

Pioneer Tunisia

Pioneer Tunisia holds interests in three production concessions and four exploration permits in southern Tunisia:

Production concessions: Jenein Nord-Cherouq, 50 % (operator); Mona/Durra, 30% (operator); Adam, 20%

Exploration permits: Jenein Nord, 100% (operator); Anaguid, 60% (operator); El Hamra, 100% (operator); Borj-El-Khadra, 40%

Source: OMV

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