Katti’s Custos seals Chevron deal

THE ART OF THE DEAL: Knowledge Katti’s oil and gas company Custos Energy is set to transfer its 10% participating interest in Petroleum Exploration Licence 90 (PEL 90) to Chevron in a deal that will give it US$11 million (N$182 million) in cash upfront while retaining exposure to future development and production revenues.

Custos announced on Thursday that its wholly owned subsidiary, Trago Energy, had entered into an agreement with Harmattan Energy Limited, a Chevron Corporation affiliate, for the transfer of its entire participating interest in PEL 90.

Under the agreement, Trago will receive US$11 million in cash upon completion of the transaction, together with further contingent consideration linked to appraisal and production milestones.

This includes revenues associated with commercial production, currently estimated at between 1.5 million and 2.5 million barrels of oil, depending on commodity price assumptions.

The transaction is, however, still subject to government, regulatory and third-party approvals.

Katti, the Custos chief executive officer and chairman, said the company had been involved in PEL 90 since its award in 2018 and had played a role in bringing Chevron into the licence in 2022.

He said the transaction would allow Custos to maintain exposure to PEL 90 while reducing its funding and capital risks.

“This transaction allows us to continue our exposure to the very bright future ahead, but in a more capital and risk efficient manner,” Katti said.

Update: Nikanor Nangolo 

Photo contributed