United Oil and Gas snaps up Egyptian business
United Oil and Gas – whose CEO Brian Larkin is a veteran of both Tullow Oil and Providence Resources – is to purchase Rockhopper Egypt for $16m (€14m).
Because the transaction will be considered a reverse takeover under the stock exchange rules, United’s shares have been temporarily suspended.
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Described by United as “transformational”, the acquisition will deliver more than 1,100 barrels of oil equivalent per day.
British Petroleum (BP) will provide United with up to $8m to finance the deal.
United and BP have also entered into an off-take agreement regarding the former’s future oil and gas production.
The agreement will give BP first preference to buy any oil produced in the future by United.
The remaining balance of the money for the deal, along with working capital, will be funded by a placing of new ordinary shares in United, as well as the use of existing cash resources, including the proceeds from the company’s recent Crown divestment in the North Sea.
Commenting on the agreement, Mr 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.”
He added: “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.”