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(Alliance News) - Shares in United Oil & Gas PLC were suspended on Tuesday as it announced a "truly transformational" acquisition from oil and gas explorer Rockhopper Exploration PLC.
UOG is to buy Rockhopper's Egyptian subsidiary, which owns a 22% interest in the Abu Sennan concession. It will pay USD16 million, with a USD8 million prepayment financing structure coming from BP PLC.
Abu Sennan includes a large exploration area, UOG said, and the other partners are Kuwait Energy, which operates the site and has a 25% stake, Global Connect Ltd with 25% and Dover Investments with 28%.
Abu Sennan produced around 813 barrels of oil equivalent per day net to Rockhopper in 2018, Rockhopper said, generating revenue of USD6.2 million.
UOG is also to raise cash through a share issue to fund the rest of the deal, without specifying how much it will raise. If there is a shortfall between the amount raised, the already paid cash element, and the USD16 million total, UOG will make it up by issuing shares directly to Rockhopper.
As part of the financing from BP, UOG has also signed an offtake agreement with the oil major.
UOG Chief Executive Brian Larkin said: "This is a truly transformational deal for United. Not only will it deliver our first production, positive cashflow and significant reserves it also offers very promising infill and exploration upside.
"Having reviewed many opportunities in the last 18 months, Rockhopper Egypt was by far and away the most exciting opportunity and the best strategic fit for our business."
"United has already built a world class portfolio of assets, combining high impact exploration in Jamaica and Benin, with low risk, low cost European assets in the UK and Italy. This diverse portfolio is already offering shareholders a range of options for value enhancement. The proposed acquisition announced today would deliver production and cash flow to this already impressive stable."
"In addition, we are very pleased with BP's support for the deal, through the provision of acquisition finance, and we look forward to developing future business together," Larkin added.
UOG shares have been suspended as the takeover has been deemed a reverse takeover under AIM rules. Rockhopper was down 3.4% at 23.14 pence Tuesday morning.
this proves that you don't know anything
I already living in qatar, the reason people are searching rkh is because of rkh qitarat, here is website http://www.rkhqitarat.com/
now not in 70s, only if you waited for 1 hour before you posted your usual drivel.
Fernan,
Very good point and i already thought of this a while ago. I don't think going without UKEF is not possible. But I think pmo does not want to go. Not because they can't afford. But because they don't want to pay for RKH carry.
If you see the current plan, they are not paying for full carry of first phase i.e. $337million.
Also other point PMO will not use all the free cash-flow for sealion. They are very scared since they lost the shirt on Solan. Although both are completely different projects but PMO management now is very careful and very risk assertive. Even after getting UKEF approval they will still bring partner, because don't want to have 60% of a project. They want to reduce their exposure to one big project and have small exposure to multiple projects just in case.
can someone post RNS
4.3. In 2015 tax legislation was introduced that prevented any tax relief for intercompany
leasing costs. The introduction of this legislation was not consulted upon and came as
surprise to the companies that were undertaking exploration activity in the Sea Lion
basin. It was therefore an unanticipated additional cost of undertaking the activity
within the Falkland Islands. Following representations from the oil industry and the
responses from the consultation exercise the 2015 legislation is to be repealed and
replaced by the hire cap legislation that will apply retrospectively from 1st October
2015.
Can anyone explain what does above mean? Does it mean that the capital gains tax they applied will/have change
BBN, thanks for valuable input, what kind of Farm-out you would expect.
1) Do you expect only appraisal farm-out, e.g. fully carried for 1 appraisal well.
2) Do you expect one appraisal and one exploration well, fully carried.
3). Do you expect one appraisal well plus some carry for development e.g. $50million for development.
the big difference between 2011-2014 and Now is the market cap of AIM companies is so low that companies can not fund any exploration/appraisals from Right Issue / Open Offer.
If market cap of Char was $150million then they can issue 20% shares and drill an appraisal well without any partner.
But in current situation the only option is partner.
This is a big Negative point, as partnering company knows this.
On positive side the market cap is very low means there is good upside left from these levels.
NigelHaemoglobin, thanks for reply, this is more worrying that Sealion is straight forward, typical project with FPSO, not much technical challenges, low tax and low royalties, still we are not able to develop in 10 years,
the point i was trying to say is HUR managed to do first oil without too much wait and without giving away 60%. Where as we gave away 60% and we are still waiting for FID let alone first oil.
I understand we are not comparing apples with apples but sharing frustration of extremely slow progress.