Repsol makes US$8.3bn offer for Talisman Energy

Repsol makes US$8.3bn offer for Talisman Energy @ US$8/share

86% premium to 12 December closing price

...but not that big in the context of the recent share price fall

Sub-Saharan Africa - newsflow update

Gabon Deepwater - Leopard discovery

• Leopard-1 was drilled on licence BCD10
• Shell 75%*, CNOOC 25%
• Encountered substantial gas column with 200m net gas pay
• Further appraisal required
• FLNG? 3-4 tcf may be required, although economics of sales into Europe are marginal
• Government is also keen to grow domestic gas market

Congo Offshore - Eni/NewAge - follow up discovery in Marine XII

• Minsala Marine discovery
• Estimated 1bnboe in place, of which 80% oil
• In same shallow water block as the Litchendjili and Nene Marine fields, both of which are currently undergoing development

Angola - first discovery in Kwanza Basin

• Pre-salt offshore Kwanza Basin - oil discovery made by Repsol
• Will evaluate commerciality of the Locosso oil field
• Located in Block 22, immediately to south of Cobalt's Block 21 which contains the play opening Cameia field
• Given remote location and water depth, Wood Mackenzie estimates will require 300mmbbl to be commercial on standalone basis

Liberia, Cote d'Ivoire - Anadarko's non-commercial wells

• Anadarko wells in West Africa all encountered non-commercial oil
• Liberia: Iroko-1 and Timbo-1
• Cote d'Ivoire: Morue-1
• http://www.anadarko.com/SiteCollectionDocuments/PDF/Operations%20Reports/APC%203Q14%20Ops%20Report%2010-28-14.pdf

Nigeria - NNPC pre-empts sale of OML25

• NNPC has pre-empted on the sale of OML25
• Post transaction, NNPC will own 100% and likely transfer the interest to NPDC
• NPDC's portfolio is already overstretched and future investment will be heavily constrained
• The winning bidder of the Shell, Eni, Total process was Crestar Integrated Natural Resources Limited
• It is believed that the pre-emption, a decision made by the Minster of Energy, is due to Crestar's Chairman being  Osten Olorunsola
• The Minister of Energy had fired Osten Olorunsola as Director of Petroleum Resources in June 2013
• http://africaoilgasreport.com/2014/11/farm-in-farm-out/nnpc-in-desperate-search-for-funds-to-pay-for-oml-25/

South Sudan - fighting likely to intensify around fields

• Government and rebels now re-arming following end of rainy season
• Sudan is providing South Sudanese Machar-led rebels with weapons and intelligence
• Rebels likely to set-up bases where they can attack oil fields
• Local self defence militia are guarding fields bolstered by Chinese peacekeepers
• Should prevent rebels gaining control of fields, but fighting likely to intensify

East African export pipeline

• World bank has pledged USD600mm funding towards Ugandan/Kenyan export pipeline
• Total cost estimated to be >USD4bn
• Project still remains in early stages - commercial structure, construction, ownership and operations all yet to be determined
• FEED contracts expected to be awarded end of 2014