A US$20 million project financing proposition
Nigeria's latest licensing round has produced winners who cannot fund their awards. Onterra buys their blocks, pays the state, drills on carry and trucks crude to market. The financier takes 90% of net cash flow until every dollar is back, then 40% of the field for life.
The situation
Every awardee in Nigeria's latest round must pay a signature bonus and lodge a working-capital bank draft by a fixed date, or forfeit the block. A meaningful number bid on financing that has not arrived. Their choice narrows to one thing: find a partner who can write the cheque, or lose everything they spent getting there.
Cash to the Federal Government, non-negotiable and non-refundable.
Bank draft evidencing the committed work programme.
From award confirmation. No extension mechanism in practice.
The block returns to the state. Bid costs and years of preparation are gone.
What we do
Buy 100% of a distressed awardee's licence for nominal consideration, leaving a 5% carry so the seller keeps upside rather than walking away with nothing.
Settle the signature bonus and lodge the working-capital draft. The block is secured and the awardee is made whole on their obligation.
A drilling contractor drills well one against future barrels at a 1.4x repayment multiple. Roughly US$8.5M of rig cost never touches the cheque.
A modular early production facility separates and stabilises crude at the wellsite. Nothing is built that can be leased.
Stabilised crude moves by road to the Dangote refinery or an export terminal. Revenue starts without waiting on third-party pipelines.
The screen
No capital moves until a candidate clears every gate. The gates are the risk management.
Returns
US$20 million in. Ninety per cent of net cash flow back until every dollar is recovered, then forty per cent of the field for the rest of its life. Security over the licence and the production account throughout.
The stress case cuts the oil price 21%, overruns capital 20%, underdelivers the well 20% and inflates operating cost 15%, all at the same time, and still returns 2.2x. Base case: one well, 3,000 bopd plateau, 10.1 MMbbl recovered, 25-year economic life. Indicative economics for discussion only, no specific licence acquired at this date.
Track record
Nikstalis Nigeria Limited, wholly owned by Onterra's founder, went through registration, the data rooms and bid submission and came out with two blocks: PPL 900 and PPL 2A61. We know exactly what the process demands, we know what the data rooms contain, and we know which awardees are struggling to fund what they won.
The ask
Waterfall, security and governance agreed. Two weeks.
Shortlist awardees under deadline pressure, open data rooms jointly, apply the reserve gate.
Capital called against a specific block only once it clears technical review.
Drill-for-oil contract signed alongside the acquisition, so spud follows in weeks.
The one-page summary downloads immediately. The full pitch deck and live financial model follow by personal email after a quick review, or go straight to a conversation. We respond within one business day.
This page has been prepared by Onterra Nigeria Limited for discussion purposes only. It is not an offer to sell, or a solicitation of an offer to buy, any security or interest, and it does not constitute investment, legal, tax or accounting advice. All production, cost, price and reserve figures are estimates prepared by Onterra and have not been independently audited or certified by a competent person. No specific licence has been acquired at the date of this page; figures represent a generic acquisition candidate meeting the screening criteria described. References to PPL 900 and PPL 2A61 relate to awards made to Nikstalis Nigeria Limited, an affiliate under common ownership with Onterra Nigeria Limited; those awards remain subject to the completion of payment obligations to the Federal Government of Nigeria. Forward-looking statements are subject to risk, and actual results may differ materially.