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UK-based oil and gas company Soco has signed and completed a sale and purchase agreement to sell its entire stake in SOCO Congo to Coastal Energy Congo.

Under the transaction, Soco will receive $10m as consideration along with an overriding royalty of up to $1 per barrel on subsequent oil and condensate production sold from the interests hold by Soco Congo.

The transaction is effective immediately.

Soco Congo held an indirect 40.39% operated interests in Lidongo, Viodo, Lideka and Loubana exploitation permits situated in the former Marine XI Block, in shallow water offshore Congo (Brazzaville).

Soco President and CEO Ed Story said: “In January 2018 the company announced that its assets in Africa were no longer a core strategic priority, and this is a step that will deliver an exit from a material portion of the non-core African business.

“This is a step that will deliver an exit from a material portion of the non-core African business.”

“The company continues to focus on creating value from the core Vietnam portfolio and on evaluating acquisition opportunities in a disciplined manner to grow and refocus our business in line with the strategy that we have outlined to the market.”

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Soco said that the financial impact of this divestment is negligible as these assets in the Congo (Brazzaville) are yet to be developed and have not generated any revenue for the company so far.

The company incurred a loss (before taxation) of $104m from the assets for the 12-month period ending 31 December 2017, primarily due to an impairment charge announced in January this year.

Soco plans to use the proceeds received from this transaction to support its growth plans, as well as pay out annual dividends to its shareholders.