Deltic Energy Rejects Reabold Offer

UK explorer Deltic Energy rejected "unequivocally" July 15 Reabold Resources' all-share takeover bid of the day before, it said July 16, as too low. The merger would also expose its own shareholders to the geological and other risks associated with Reabold's own assets, it said.

Deltic – formerly known as Cluff Resources – said the bid placed no value on its "significant non cash assets, not least its share of two potential high impact exploration wells with their partner Shell and does not even reflect the existing cash balance of Deltic Energy."

Deltic also said there was no "strong rationale, commercial logic or sufficient operational synergies that would justify a combination of the two businesses." 

Further, it said that the bid did not reflect "the commercial and technical risks associated with the Reabold portfolio that Deltic shareholders would be exposed to in the event of a combination of the two businesses." Claiming "detailed understanding of a number of Reabold's investments, in particular, the West Newton project," it said it had "serious concerns in relation to the technical viability, materiality and limited potential upside associated with various of these projects."

And it said it did not need the financial clout such a merger could bring, as "unlike many of its competitors, Deltic Energy is fully funded to deliver on its existing strategy, including for its share of two potential high impact exploration wells, which Shell farmed into following an extensive period of technical and commercial due diligence, as well as its working capital requirements through to mid-2022."

A late June NGW in-depth interview with Deltic Energy on its North Sea plans may be read here.