United Oil & Gas Progresses UK, Egyptian Deals
UK-listed United Oil & Gas has almost bought Rockhopper's Egyptian business for $16mn and sold its own UK North Sea Blocks 15/18d and 15/19b (Licence P2366) to Anasuria Hibiscus for $5mn, it said October 7.
The partners in the Abu Sennan concession "have all irrevocably and unconditionality waived their pre-emption rights," United said. This is "an important milestone and its successful completion is a major step towards completion of the acquisition which will deliver over 1,100 barrels of oil equivalent (boe)/day of net low-cost production with 2.64mn boe net 2P reserves," with further upside. The effective date will be January 2019.
UK major BP, which has a substantial Egyptian oil and gas business of its own, is providing up to $8mn, or half the price, to fund the proposed acquisition. The rest will come from new ordinary shares in United, its own cash resources and proceeds from the UK asset sale. Rockhopper Exploration has agreed to accept up to $5mn in shares which it has to hold on "lock-up and orderly market disposal provisions" for up to 12 months from completion and United will issue them subject to shareholders' agreement.
United was awarded the North Sea blocks in the 30th licensing round, in August 2018, and holds a 95% equity interest, the other 5% belonging to Swift Exploration. The blocks include the Crown Discovery, initially discovered by ConocoPhillips in 1998. United said that "low-cost but important data analysis, carried out by the United team, has added significant value to the licence since acquisition."
United CEO Brian Larkin said these were "highly significant announcements for United which move us closer to our goal of completing a transformational acquisition. We are confident that when we are re-admitted to (London's alternative investment market) AIM later this year, we will have achieved our goal of creating a full cycle oil and gas company with exceptional prospects for growth. Our portfolio will include high impact exploration assets, low risk development opportunities, discoveries which are near to production and producing assets which show considerable potential for further reserves."