Namibia’s Custos to transfer PEL 90 stake to Chevron affiliate in $11mn deal

Namibian explorer Custos Energy has agreed to transfer a 10% participating interest in offshore Petroleum Exploration Licence 90 (PEL 90) to Chevron Corporation (NYSE:CVX) affiliate Harmattan Energy Limited for $11mn upfront, with additional payments linked to future appraisal and production milestones.

The transaction involves Trago Energy Pty Ltd, a Custos subsidiary in which Sintana Energy (TSX-V:SEI, AIM:SEI, OTCQX:SEUSF) holds a 49% indirect stake. Trago will receive $11mn in cash upon completion while retaining exposure to potential future upside through contingent consideration linked to commercial production.

Completion remains subject to government, regulatory and third-party approvals. Once closed, Trago will no longer hold a participating interest in PEL 90 and will no longer be required to fund its share of licence costs, including the planned Nabba-1X exploration well.

PEL 90 covers about 5,433 sq km offshore Namibia in the Orange Basin and is operated by Chevron. The licence is located in a basin where discoveries by TotalEnergies (EPA:TTE, NYSE:TTE) and Shell (LSE:SHEL, NYSE:SHEL) have increased international interest in Namibia’s offshore acreage.

The transaction follows a wider pattern of smaller explorers in Namibia seeking larger partners or reducing exposure to costly offshore exploration programmes. While Chevron’s increased position highlights continued participation by major oil companies in the basin, PEL 90 remains an exploration asset and future value depends on drilling results, appraisal success and a future development decision.

"Namibia’s greatest resource is its young people," Custos chairman and CEO Knowledge Katti said, adding that the transaction would allow the company to maintain exposure to PEL 90 while reducing capital and funding risks.

Custos said it would contribute NAD10mn ($0.6mn) to the University of Namibia Foundation towards construction of a new campus in Walvis Bay once the transaction is completed.