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WFWAP advises M3nergy on US$265m acquisition of FPSO Bertam owner from Lundin Petroleum AB

3 February 2016

International law firm Watson Farley & Williams Asia Practice LLP (“WFWAP”) advised long-standing client M3nergy Berhad (“M3nergy”), a subsidiary of the Sabah Development Bank, on the acquisition of Lundin Services Limited (“LSL”), a Labuan company which owns the FPSO Bertam from Lundin Petroleum AB (“Lundin”).

The transaction, which is worth US$265 million, is slated to complete during the first quarter of 2016.

WFWAP advised M3nergy on a share purchase agreement with Lundin, under which an M3nergy group company will acquire the entire issued share capital of LSL. WFWAP was also heavily involved in advising on the FPSO charter and related project documents.

M3nergy is an emerging exploration and production company, headquartered in Malaysia, which provides services to the oil & gas industry in South East Asia. It is owned by the Sabah Development Bank, which is itself owned by the Ministry of Finance of the State of Sabah.

The FPSO Bertam underwent an extensive upgrade programme in 2015 and it is now operating in the Bertam field in Block PM307, which is located offshore Malaysia. The Bertam field commenced production in April 2015.

Partners Chris Kilburn and Andrew Nimmo led the WFWAP team, assisted by associate Mark Jalen Tan.

Chris commented “There is increasing pressure on oil and gas companies to sell down non-core assets and free up capital to support the development of key projects. We have worked with the M3nergy group on a number of acquisitions in the E&P sector and, with the oil price showing little sign of a material rebound in the short term, there should be further opportunities as buyer and seller price expectations converge”.

Andrew commented “We are delighted to have advised our long-standing client, M3nergy, on another successful transaction. The deal shows that, despite the current volatile market, business continues, and successful and mutually beneficial transactions are there to be done if parties are clear in their strategy and find the right fit in terms of their counterparty. It also further reinforces WFWAP’s position as a market leader in the oil & gas sector in Malaysia and the wider Asia Pacific region.”