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LONDON (Alliance News) - Worthington Group PLC said Thursday that it has agreed to invest GBP12.5 million in Africa-focused oil and gas exploration company CPS Energy Resources PLC.
CPS, which is expected to list next year, is working in partnership with Johannesburg-listed Oando PLC, and its main asset its an 80.65% interest in oil and gas block OPL 236. The block is over 1,600 square kilometres, and is in the oil rich Niger Delta.
Worthington said the block is surrounded on each side by proven oil and gas fields, including the Shell Imon River fields, which are Nigeria's largest onshore fields.
Under the deal, Worthington will subscribe for GBP12.5 million in shares at a price that equates to 27.5% of the agreed likely stock market value of the company, which is expected to list in 2015. To help fund the deal Worthington is seeking shareholder approval to allot and issue new shares; loan note holders have agreed to exercise their conversion rights, and to place shares resulting from this conversion.
They have agreed to re-invest the proceeds by acquiring new loan notes with a conversion price of 195 pence per share.
"Oil and gas is an attractive investment area for us. We are hopeful that this transaction and our new relationships in Africa will lead to further oil and gas opportunities in the region over the coming months," said Chief Executive Doug Ware in a statement.
Shares in Worthington are trading up 20.0% at 180.00 pence Thursday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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