African-focused explorer Ophir Energy is to sell off a 20% stake in its Tanzanian interests for £780million.
Pavilion Energy is to take a stake in three blocks off the coast of the East African republic, where the company has made significant gas discoveries over the last few years.
The company, along with partners BG Group, had raised its estimate for the amount of gas in the region to 13 trillion cubic feet.
Pavilion, owned by Singapore investment firm Temasek will pay $1.25billion for the stake in the fields, with a further payment of $38million due following a final investment decision in the blocks in 2016.
“This investment in Tanzania blocks 1, 3 and 4 is a key milestone for Pavilion Energy to build up our LNG portfolio,” said Pavilion chief executive Seah Mong Ming.
“It supports our plan to secure long-term energy supply at competitive prices to meet the need for clean energy in Asia. This is also important for us as we work to develop an Asian LNG hub.”
News of the deal comes as Ophir confirmed cash balances of more than £466million in the bank at the end of September, not including the sale of the Tanzania interest.
“The last three months has been another active period for the company both corporately and operationally,” said chief executive Nick Cooper.
“We are pleased to announce today the part sale of our interests in Blocks 1, 3 and 4 Tanzania where appraisal activities have increased resource estimates and further derisked the commercial value of the potential development.
“We are about to enter a period of significant high-impact drilling that could be transformational for the company on success. This starts shortly with the Mlinzi Mbali-1 in Block 7, Tanzania and continues in Gabon with Padouck Deep, the first well on the pre-salt play, in Q1 2014 with further drilling planned during 2014.”