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The Initial Public Offering (IPO) fever that has gripped the oil industry, following Seplat's $1.9 billion listing on the London and Nigerian Stock Exchanges has not escaped the service sector. Caverton Offshore chairman, Aderemi Makanjuola has just announced that Caverton is going public, which on listing will make Caverton the first indigenous oil and gas service company to list on the Nigerian Stock Exchange.  

Caverton Offshore Support Group provides a variety of services to the marine and oil and gas sectors, including equipment, supplies, provision of marine vessels, workboats, jack-up rigs, tugs and allied equipment and services. The company's focus and primary business is to provide logistics and environmental support services to oil and gas fields.  

The jewel in the crown of the offshore services group is Caverton Helicopters, which started life in 2002 as an intra-city helicopter service has grown to become a charter, shuttle, sales and maintenance company. Caverton Helicopters made history as Nigeria's first in the rotary subsector to start international operations after expanding its operations to Cameroon under a 5-year contract with the Cameroon Oil Transportation Company.  

The company's big break came when Shell awarded Caverton Helicopters (alongside its partner, Dancopter of Denmark) a five-year contract valued at $648 million for the provision of six AW139 helicopters, after a rigorous and competitive bidding process. The contract was the largest ever awarded by Shell to any indigenous company in Nigeria.

Caverton currently operates out of a 10,000 square metre flight facility at the Murtala Muhammed Airport in Lagos, a 9,000 square metre facility in Port Harcourt, and also from the Shell bases in Warri and Port Harcourt. The company also operates the only heliport in Lagos metropolis (Victoria Island) and has 18 aircraft in its fleet.

As to why he now wants to go against the grain of family companies, and take the company public, forward thinking Makanjuola says the decision was signed off by the board back in 2008. He says that the board figured that given the significant growth opportunities, debt-financing would be limiting. He said: "We decided that the equity funding route will ultimately give the best return on capital. So the journey to tapping into the Nigerian equity market began with our private placement in 2008, which culminated in the imminent listing. The timing was determined by a combination of the prevailing market conditions and the company's current growth stage."

The company has engaged KPMG to advise on the IPO and take it through the regulatory hurdles it has to surmount before it can list on the Nigerian Stock Exchange.

Court Has Jurisdiction to Hear Chevron Divestment Dispute with Brittania-U

Indigenous oil company, Brittania-U's quest to be declared winner of the bid for Chevron's onshore blocks, Oil Mining Leases (OMLs) 52, 53 and 55 has received a boost after a judge in the Federal High Court ruled that it had jurisdiction to hear the matter. Chevron had sought a dismissal of the case, brought by Brittania-U against it, in which Seplat is joined as a co-defendant. Chevron had argued that the Court did not have jurisdiction over the matter.

The dispute arose after US oil giant Chevron put up its 40 per cent share of the three OML's, part of a planned five-asset onshore divestment, for sale.  The oil major, which confirmed the auction of the three onshore blocks in June 2013, was reportedly keen to wrap the process up quickly. After an initial invitation to 20 companies, Chevron had to open the process up to more companies as it was inundated with applications.

A preferred shortlist emerged in mid August enabling the preferred bidders to do more in-depth due diligence and finalise their bids. They were then expected to submit their final bids by the 30th of September and to pay 15 per cent of their bids as a deposit. Sources close to the deal said at the time that Chevron would prefer to sell the three OMLs in one lot and has already weeded out bidders who were not interested in acquiring all three assets.

The three blocks are said to have total oil reserves of around 134 million barrels and five trillion cubic feet of gas, with the combined values of the three blocks being estimated currently at between US$500 million and US$600 million. 

NOGintelligence reported in Issue 70 that Britannia-U, First Hydrocarbon, SEPLAT, Seven Energy, Sogenal, South Atlantic Petroleum (SAPETRO) and Vertex were all said to be among local players that were expected to put in a final bid. The enthusiasm of the bidders for the rare assets was unaffected by the Nigerian National Petroleum Corporation (NNPC)'s declaration mid-race that bidders should not expect to assume operatorship as the role, currently fulfilled by Chevron in the blocks, would revert to NNPC following the divestment.

It soon became clear that trouble was brewing after conflicting rumours began to circulate of the winners. On the one hand, Britannia-U was said to have won with a $1.6 billion bid for all three assets. On the other hand, three companies, working in close corporation were said to have won the bids for the three assets. Seplat, the recently listed company that can seem to do no wrong, was said to have bid for OML 53, while Amni, recently having undergone a boardroom shuffle, was said to have bid for OML 52 and Delta State-owned Belema Oil was said to have bid for OML 55, altogether putting in a reported combined bid of $900 million.

As time went on, Chevron notified the losers, but continued to drag its feet over declaring Britannia-U the winners. According to Britannia, it came to their notice that Chevron was communicating with Seplat.  They went to court to ask to be declared winners of the auction on the basis of having put in the highest bid. They immediately secured a High Court injunction, preventing Chevron from transferring the assets to Seplat or any other bidder. Chevron had sought to have the case thrown out for lack of jurisdiction on the basis that it was a private commercial matter and further that it should be referred to arbitration on the basis of the confidentiality agreement signed by the parties.

The court ruled that there was a triable dispute over which it had jurisdiction. Among the issues stated in Statement of Claim that are to be determined are: why the highest bidder for the leases was not announced, whether the bid process had been transparent and whether Chevron had arbitrarily or whimsically terminated the bid which Britannia-U alleges it won. 

The case, in which Brittania-U is seeking specific performance, was adjourned to May 23, 2014. The marginal field producer is seeking $10 billion dollars in damages in the alternative.

NOGintelligence readers will recall that as many competitor publications continued to declare Seplat and its co-bidders the winners, NOGintelligence cautioned against writing off the chances of Britannia-U led by the indomitable Uju Ifejika. As we said, all those wishing to write off the company's chances would do well to remember the saying in the world of opera: "It ain't over till the fat lady sings." As we said, so it has come to pass. It seems that the fat lady hasn't sung yet! 

21st Africa Oil Week

Cape Town, South Africa

3-7 November 2014 

 http://www.petro21.com/events 

32nd Annual International Conference of the Nigerian Association of Petroleum Explorationists

Lagos, Nigeria

09-13 November 2014 

www.nape.org.ng 

Practical Nigerian Content

Yenagoa, Nigeria

18-20 November

 http://www.ncipnc.com/  

Mozambique Gas Summit

Maputo, Mozambique 

2-5 December 2014 

http://www.mozambique-gas-summit.com/