MX Oil on Tuesday announced that it has signed a term sheet with a recommended buyer who is part of a recognized international oil and gas group for its investment in the proven Aje field offshore Nigeria.

MX is to get $18 millions for the sale of its investment after it meets some certain conditions. The conditions involves the advancement of about $3.5 million to the Company in two stages following the signing of binding legal documentation. The money will be used to fund outstanding cash calls estimated to be needed for the investment so as to bring the basic asset to production.

The undisclosed buyer will afterwards have the right to procure the investment, which will probably be when first oil production begins. On applying the purchase right, MX will be $5.75 million and after six months get another payment of $5.75 million.  The remaining $3 million will be paid to the company every three years. $1 million from the date of the implementation of the acquisition right, though the payments is likely to be hastened if global oil prices surpasses $45 per barrel for a three month period.

Under the agreement, if the buyer decides not to exercise its purchase right, then the initial advancement will either be paid back, changed to a convertible loan in the company or turn into a secured loan which will be paid back from revenue generated from oil production.

“The US$18 million proposal received for our Nigerian investment represents a significant upside to our current market value of £5 million and therefore we will be progressing this whilst, at the same time, continuing to consider our other funding options.  We will keep the market informed as the situation develops,” Stefan Olivier MX Oil's CEO told Energy-pedia.

Anita Fatunji