United Oil and Gas – whose CEO Brian Larkin is a veteran of both Tullow Oil and Providence Resources – it to purchase Rockhopper Egypt for $16m (€14m).

The deal includes a 22pc non-operated position in the Abu Sennan concession onshore Egypt.

Because the transaction will be considered a reverse takeover under the stock exchange rules, United’s shares have been temporarily suspended.

Described by United as “transformational”, the acquisition will deliver over 1,100 barrels of oil equivalent per day.

British Petroleum (BP) will provide United with up to $8m (€7m) to finance the deal.

United and BP have also entered into an offtake agreement regarding United’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 cash for the deal, along with working capital, will be funded by a placing of new ordinary shares in United, along with use of existing cash resources, including the proceeds from the company’s recent Crown divestment in the North Sea.

Brian Larkin, CEO of United Oil and Gas, 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.”

 

VIEW SOURCE