Sintana partner adds TotalEnergies as PEL 83 operator

Executive Summary

• Sintana Energy Inc. reports that TotalEnergies has entered an agreement to take over operatorship of PEL 83 in Namibia from Galp Energia, increasing TotalEnergies' participating interest to 40% while Galp retains 40%.
• The agreement includes a commitment to launch an exploration and appraisal campaign on PEL 83, including at least three wells over the next two years to derisk the block and define an initial development hub, with the first potential well under assessment for 2026.
• A financing agreement was signed where TotalEnergies will carry 50% of Galp's investments for the first development in Mopane, repayable from 50% of Galp's future cash flows post-first commercial oil; Sintana (via Custos Energy) retains its 4.9% effective interest and benefits from existing carry provisions.

Key Details

• Operatorship Change: TotalEnergies replaces Galp Energia as the operator of Petroleum Exploration Licence 83 (PEL 83) in Namibia's Orange basin.
• Participating Interests:
  • TotalEnergies: 40% (new).
  • Galp Energia: Reduced from 80% to 40%.
  • Namcor (National Petroleum Company of Namibia): 10% working interest.
  • Custos Energy Pty. Ltd. (indirectly owned 49% by Sintana Energy): 10% working interest (effective 4.9% interest in PEL 83).
• Exploration Plan: Commitment to an exploration and appraisal campaign including at least three wells over the next two years.
• Timeline: First potential well under assessment for 2026; transaction completion expected during 2026, subject to customary third-party approvals from Namibian authorities and joint venture parties.
• Financing Terms: Galp and TotalEnergies signed a financing agreement where TotalEnergies carries 50% of Galp's investments for the first development in Mopane. Repayment occurs following first commercial oil through 50% of Galp's future cash flows from the project.
• Sintana's Position: Sintana maintains an indirect 49% interest in Custos Energy, which holds the 10% working interest in PEL 83. Custos continues to benefit from the carry provided in the prevailing joint operating agreement.
• Strategic Context: CEO Robert Bose cites the quality of the Mopane discoveries and increased technical/financial resources as value drivers. Sintana is also in advanced stages to acquire Challenger Energy Group PLC to add offshore interests in Uruguay.

Notable Quotes

• "The addition of TotalEnergies to the PEL 83 partnership as operator and significant participating interest owner speaks to the quality and scale of the opportunity, including most materially the discoveries at Mopane. The increase in committed technical and financial resources to continue to progress and mature PEL 83 provide an opportunity to increase the value of our interests therein," said Robert Bose, chief executive officer of Sintana.