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LONDON (Alliance News) - Rockhopper Exploration PLC Monday said the proposed acquisition of a stake in the Abu Sennan concession in Egypt is "unlikely to proceed" after one of the Abu Sennan joint venture parties exercised its right of pre-emption to poach the deal from the company.
The oil and gas company said in August it had struck a deal to pay USD22.0 million to acquire the entire issued share capital of Beach Energy, which owns a 22% interest in the Abu Sennan concession and a 25% stake in the El Qu'a Plain concession.
However, on Monday the company said Beach Energy has informed the company that one of the Abu Sennan joint venture parties has exercised its right of pre-emption, which means the share-sale agreement signed to complete the deal is "therefore unlikely to be satisfied and, accordingly, the entire acquisition is unlikely to proceed," it said.
"We are clearly disappointed to have been pre-empted on the proposed transaction. Nonetheless, the fact that one of the joint venture partners has decided to pre-empt demonstrates that we have successfully identified a good quality opportunity and been able to negotiate the purchase on attractive terms," said Chief Executive Sam Moody.
The company also said Monday in a separate statement that the sidetrack well at the Guendalina gas field offshore Italy has been drilled and said wireline logging has "confirmed that all the target levels are gas bearing".
"Wireline logging has confirmed that all the target levels are gas bearing and have been encountered slightly higher to prognosis in an up-dip position with good reservoir characteristics and with an additional deeper gas level. The well is now being completed as a producer with gas production anticipated to commence in late October at which time a further announcement will be issued," Rockhopper said.
Rockhopper has a 20% stake in the gas field alongside operator and major Italian oil firm Eni. The well was drilled to a target depth of 3,276 metres measured depth, and was completed on time and on budget.
Rockhopper shares were down 1.0% to 39.62 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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