The Navitas Petroleum (TASE: NVPT), controlled by Gideon Tadmor, announced today that it had made a final investment decision to develop the huge Shenandoah Project in US economic waters in the Gulf of Mexico.
The total project budget is NIS 1.8 billion, with Navitas holding 49% of the rights in the reserve through subsidiary ShenHai, is $900 million. Earlier this month it was reported that the partnership had signed a finance agreement for developing the project.
The other partners in the project are Beacon Offshore Energy (20.05%) and BOE II Exploration (10.95%) owned by Blackstone, while a further 20% will be held by BOE III Shen, owned by Quantum Energy Partners.
At the same time as the final investment decision, the financial closing also took place of the project finance agreement signed, as mentioned, earlier this month.
"The Shenandoah Project will generate a great deal of value for Navitas, and we are very proud of the way we have come, from the stage of the acquisition of rights to bringing it to the development stage, while successfully keeping to all the milestones and the plans we presented to the investors," Navitas chairman Tadmor said.
Shenandoah is one of the largest reserves in the Gulf of Mexico, estimated at some 431 million barrels of oil. After development is complete in 2024, the project is expected to produce 80,000 barrels of oil a day from four production wells, and yield a capitalized cash flow (at a 10% capitalization rate) to Navitas of $1.4 billion and EBITDA of $750 million in the first year of production (at a price of $58 a barrel). The breakeven price for the project is $16 a barrel.
Published by Globes, Israel business news - en.globes.co.il - on August 26, 2021
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