Herbert Smith has advised First Hydrocarbon Nigeria Company (FHN) on a US$230 million financing to acquire and develop onshore oil assets previously owned by Shell, Total and Eni.

FHN is a Nigerian oil and gas company established in 2009 and 45% owned by UK-listed independent Afren PLC. The lenders to FHN were a range of Nigerian banks led by Stanbic IBTC Bank PLC and First City Monument Bank PLC.

FHN is using the proceeds to acquire and develop a 45% stake in an onshore oil block, Oil Mining Lease 26, previously owned by Shell, Total and Eni. It also provides financing to support the future development of the oil block.

Partner Jason Fox led the Herbert Smith team, assisted by senior associate Mette Rolle, associate Suchita Ramanathan and trainee Lucy Johnson.

Jason commented:

“This is a genuinely landmark transaction in the Nigerian loan markets. All of the up to US$230 million of senior secured reserve-based debt has been provided by Nigerian institutions, reflecting the capacity and appetite of the local banking system to finance Nigerian upstream oil & gas transactions.”

Natalie Dickson, First Hydrocarbon Nigeria’s general counsel, said:

“Herbert Smith are the acknowledged market leaders in reserve based lending and we were delighted to have their skills and expertise on our side in bringing this transaction to a successful financial close.”

Adepetun Caxton-Martins Agbor & Segun advised on local law, while Aluko and Oyebode advised the lenders on Nigerian law, with Wragge & Co advising the lenders on English law.