Transcorp to start drilling plans after Nigeria oilfield deal


Transcorp to start drilling plans after Nigeria oilfield deal


LAGOS, Nigeria (Bloomberg) -- Transnational Corp. of Nigeria Plc, which has interests ranging from agriculture to oil, said it will drill wells on its prospecting lease after signing a production-sharing deal with the state oil company.

Transcorp paid $30 million for oil-prospecting lease 281, or OPL 281, following a sale by the Nigerian government in 2007. The lease holds an estimated 104 MMbbl of oil reserves, 335 MMbbl of probable additional reserves and about 4 Tcf of gas, the Lagos-based company said in an emailed statement.

“We are excited by this development and the opportunity to fully exploit the huge reserves and gas resources,” said company Chairman Tony Elumelu. “We will produce enough gas to run our Ughelli plant to its current installed capacity of 1,000 megawatt and expand this to over 3,000 megawatt in the near future.”

Transcorp, 44% owned by Elumelu, was set up in 2004 to invest in industries in Africa’s biggest economy. It bought the Ughelli gas-fired power plant last year following a government sale of former state-owned utilities. Its market value has increased almost tenfold to 142.9 bn naira ($900 million) since 2008, according to data compiled by Bloomberg.

The company plans to raise $1 bn to build power plants as it seeks to triple profit this year, CEO Obinna Ufudo said on April 11.

Transcorp will partner with Energy Equity Resources, a Nigerian oil and gas company, and Johannesburg-based SacOil Holding Ltd. in the ownership and development of OPL 281, the company said.

The stock climbed as much as 9.9%, the biggest intraday gain since March 6, to 3.76 naira and traded 7.9% higher at 3.69 naira by 12:53 p.m. in Lagos.

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